‎ UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

_____________________________________________________

FORM 10-Q

_____________________________________________________

(Mark One)


	☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended ~~March~~ June 3130, 2025


	☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ______to _____

Commission File Number: 001-31588

SUNATION ENERGY, INC.

(Exact name of registrant as specified in its charter)


Delaware		41-0957999
(State or other jurisdiction of incorporation or organization)		(Federal Employer Identification No.)

171 Remington Boulevard, Ronkonkoma, NY 11779		11779
(Address of principal executive offices)		(Zip Code)

(952) 996-1674

Registrant’s telephone number, including area code

Securities Registered Pursuant to Section 12(b) of the Act

Title of Each Class	Trading Symbol	Name of each exchange on which registered
Common Stock, par value $0.05 per share	SUNE	The Nasdaq Stock Market LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. YES ☒ NO ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). YES ☒ NO ☐

Indicate by a check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large Accelerated Filer ☐ Accelerated Filer ☐ Non-accelerated Filer ☒

Smaller Reporting Company ☒ Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act. YES ☐ NO ☒

APPLICABLE ONLY TO CORPORATE ISSUERS:

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

Outstanding at ~~May~~August 1214, 2025 3,406,614

SUNATION ENERGY, INC.

INDEX

			Page No.
Part I.	Financial Information
	Item 1.	Financial Statements (Unaudited)
	Condensed Consolidated Balance Sheets		2
	Condensed Consolidated Statements of Operations and Comprehensive Loss		4
	Condensed Consolidated Statements of Operations		4
	Condensed Consolidated Statements of Changes in Redeemable Convertible Preferred Stock and Stockholders’ Equity (Deficit)		5
	Condensed Consolidated Statements of Cash Flows		710
	Notes to Condensed Consolidated Financial Statements		912
	Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	3540
	Item 3.	Quantitative and Qualitative Disclosures about Market Risk	4350
	Item 4.	Controls and Procedures	4350
Part II.	Other Information		4553
SIGNATURES CERTIFICATIONS			4757

‎

SUNATION ENERGY, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
ASSETS
	March 31		December 31
	June 30		December 31
	2025		2024
CURRENT ASSETS:
Cash and cash equivalents	$	13,~~447~~186,~~329~~757	$	839,268
Restricted cash and cash equivalents		~~292~~286,~~901~~630		312,080
Trade accounts receivable, less allowance for
credit losses of $215,738 and $240,817, respectively		3,~~927~~298,~~676~~944		4,881,094
Inventories, net		2,512,552		2,707,643
Inventories		2,321,966		2,707,643
Related party receivables		23,739		23,471
Prepaid income taxes		15,776		—
Prepaid expenses		1,383,296		1,587,464
Related party receivables		23,039		23,471
Costs and estimated earnings in excess of billings		692,821		560,648
Prepaid expenses		1,028,996		1,587,464
Other current assets		264,875		198,717
Costs and estimated earnings in excess of billings		604,077		560,648
TOTAL CURRENT ASSETS		10,545,189		11,110,385
Other current assets		185,227		198,717
PROPERTY, PLANT AND EQUIPMENT, net		1,164,610		1,238,898
TOTAL CURRENT ASSETS		10,951,412		11,110,385
PROPERTY, PLANT AND EQUIPMENT, net		1,107,372		1,238,898
OTHER ASSETS:
Goodwill		17,443,869		17,443,869
Operating lease right of use asset		3,600,546		3,686,747
Operating lease right of use asset, net		3,513,114		3,686,747
Intangible assets, net		11,~~661~~102,~~458~~083		12,220,833
Other assets, net		12,000		12,000
TOTAL OTHER ASSETS		32,~~717~~071,~~873~~066		33,363,449
TOTAL ASSETS	$	44,~~427~~129,~~672~~850	$	45,712,732
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable	$	6,~~514~~406,~~331~~277	$	8,032,769
Accrued compensation and benefits		~~817~~783,~~585~~430		796,815
Operating lease liability		~~329~~327,~~793~~454		321,860
Accrued warranty		~~183~~190,~~375~~411		350,013
Other accrued liabilities		1,~~375~~318,~~025~~915		1,055,995
Accrued loss contingencies		~~342,216~~—		1,300,000
Income taxes payable		~~19,686~~—		5,071
Refundable customer deposits		1,~~426~~533,~~398~~688		1,870,173
Billings in excess of costs and estimated earnings		~~298~~421,~~173~~474		444,310
Contingent value rights		~~292~~286,~~901~~630		312,080
Earnout consideration		~~2,110,896~~—		2,500,000
Contingent forward contract		5,406,033		—
Current portion of loans payable		330,112		3,139,113
Current portion of loans payable		351,249		3,139,113
Current portion of loans payable - related party		1,203,401		6,951,563
Current portion of loans payable - related party		806,154		6,951,563
Embedded derivative liability		—		82,281
TOTAL CURRENT LIABILITIES		2012,~~273~~801,~~815~~792		27,162,043
LONG-TERM LIABILITIES:
Loans payable and related interest		1,~~248~~172,~~397~~996		6,531,650
Loans payable and related interest - related party		4,~~712~~328,~~780~~137		—
Operating lease liability		3,~~385~~308,~~783~~028		3,471,623
TOTAL LONG-TERM LIABILITIES		9,346,960		10,003,273
Accrued compensation and benefits		416,855		—
TOTAL LONG-TERM LIABILITIES		9,226,016		10,003,273
COMMITMENTS AND CONTINGENCIES (Note 6)
STOCKHOLDERS' EQUITY
Series A Convertible preferred stock, par value $1.00 per share; 3,000,000 shares authorized; no shares issued and outstanding, respectively		—		—
Series D preferred stock, par value $1.00 per share; 3,000,000 shares authorized; 1 and no shares issued and outstanding, respectively		1		—

Common stock, par value $0.05 per share; 125,000 shares authorized;
Series B preferred stock, par value $1.00 per share; 3,000,000 shares authorized; no shares issued and outstanding, respectively		—		—
81,391 and 9,343 shares issued and outstanding, respectively(1)		4,070		467
Series D preferred stock, par value $1.00 per share; 3,000,000 shares authorized; 1 and no shares issued and outstanding, respectively		—		—
Additional paid-in capital(1)		61,198,304		51,445,995
Common stock, par value $0.05 per share; 1,000,000,000 shares authorized;
Accumulated deficit		(46,395,478)		(42,899,046)
3,406,614 and 9,343 shares issued and outstanding, respectively(1)		170,331		467
TOTAL STOCKHOLDERS' EQUITY		14,806,897		8,547,416
Additional paid-in capital(1)		77,934,604		51,445,995
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$	44,427,672	$	45,712,732
Accumulated deficit		(56,002,893)		(42,899,046)
TOTAL STOCKHOLDERS' EQUITY		22,102,042		8,547,416
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$	44,129,850	$	45,712,732
(1) Prior period results have been adjusted to reflect the reverse stock split of the common stock at a ratio of 1-for-200 that became effective April 21, 2025, the reverse stock split of the common stock at a ratio of 1-for-50 that became effective October 17, 2024 and the reverse stock split of the common stock at a ratio of 1-for-15 that became effective June 12, 2024. See Note 1, "Nature of Operations," for further details.
The accompanying notes are an integral part of the condensed consolidated financial statements.

SUNATION ENERGY, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
	Three Months Ended March 31
	Three Months Ended June 30				Six Months Ended June 30
	2025		2024		2025		2024
Sales	$	1213,~~636~~064,~~638~~254	$	13,~~219~~549,~~197~~420	$	25,700,892	$	26,768,617
Cost of sales		8,~~205~~224,~~313~~737		8,~~413~~757,~~749~~066		16,430,050		17,170,815
Gross profit		4,~~431~~839,~~325~~517		4,~~805~~792,~~448~~354		9,270,842		9,597,802
Operating expenses:
Selling, general and administrative expenses		6,~~039~~443,~~298~~729		6,~~629~~558,~~027~~923		12,483,027		13,187,950
Amortization expense		559,375		709,375		1,118,750		1,418,750
Fair value remeasurement of SUNation earnout consideration		—		(~~350~~450,000)		—		(800,000)
Total operating expenses		67,~~598~~003,~~673~~104		6,~~988~~818,~~402~~298		13,601,777		13,806,700
Operating loss		(2,~~167~~163,~~348~~587)		(2,~~182~~025,~~954~~944)		(4,330,935)		(4,208,898)
Other (expense) income:
Investment and other income		4827,~~165~~661		4527,~~841~~325		75,826		73,166
Gain on sale of assets		—		~~6,118~~—		—		6,118
Fair value remeasurement of warrant liability		—(7,531,044)		(3,~~728~~267,~~593~~571)		(7,531,044)		461,022
Fair value remeasurement of contingent forward contract		109,492		—
Fair value remeasurement of embedded derivative liability		—		(1,055,600)		—		(1,055,600)
Fair value remeasurement of contingent value rights		19,179		376,085
Fair value remeasurement of contingent forward contract		789,588		—		899,080		—
Financing fees		(576,594)		—
Fair value remeasurement of contingent value rights		6,271		116,775		25,450		492,860
Interest expense		(571,240)		(764,870)
Financing fees		(559,938)		—		(1,136,532)		—
Loss on debt extinguishment		(343,471)		—
Interest expense		(162,130)		(735,633)		(733,370)		(1,500,503)
Other (expense) income, net		(1,314,469)		3,391,767
Loss on debt extinguishment		—		—		(343,471)		—
Net (loss) income before income taxes		(3,481,817)		1,208,813
Other expense, net		(7,429,592)		(4,914,704)		(8,744,061)		(1,522,937)
Income tax expense		14,615		6,162
Net loss before income taxes		(9,593,179)		(6,940,648)		(13,074,996)		(5,731,835)
Net (loss) income		(3,496,432)		1,202,651
Income tax expense (benefit)		14,236		(6,633)		28,851		(471)
Deemed dividend on extinguishment of Convertible Preferred Stock		—		(751,125)
Net loss		(9,607,415)		(6,934,015)		(13,103,847)		(5,731,364)
Deemed dividend on modification of PIPE Warrants		—		(10,571,514)
Deemed dividend on extinguishment of Convertible Preferred Stock		—		—		—		(751,125)
Net loss attributable to common shareholders	$	(3,496,432)	$	(10,119,988)
Deemed dividend on modification of PIPE Warrants		—		—		—		(10,571,514)
Basic net loss per share(1)	$	(106.71)	$	(38,414.84)
Net loss attributable to common shareholders	$	(9,607,415)	$	(6,934,015)	$	(13,103,847)	$	(17,054,003)
Diluted net loss per share(1)	$	(106.71)	$	(38,414.84)
Basic net loss per share(1)	$	(3.14)	$	(11,022.91)	$	(8.42)	$	(38,216.49)
Weighted Average Basic Shares Outstanding(1)		32,766		263
Diluted net loss per share(1)	$	(3.14)	$	(11,022.91)		(8.42)		(38,216.49)
Weighted Average Dilutive Shares Outstanding(1)		32,766		263
Weighted Average Basic Shares Outstanding(1)		3,063,743		629		1,556,627		446
(1) Prior period results have been adjusted to reflect the reverse stock split of the common stock at a ratio of 1-for-200 that became effective April 21, 2025, the reverse stock split of the common stock at a ratio of 1-for-50 that became effective October 17, 2024 and the reverse stock split of the common stock at a ratio of 1-for-15 that became effective June 12, 2024. See Note 1, "Nature of Operations," for further details.
Weighted Average Dilutive Shares Outstanding(1)		3,063,743		629		1,556,627		446
The accompanying notes are an integral part of the condensed consolidated financial statements.
(1) Prior period results have been adjusted to reflect the reverse stock split of the common stock at a ratio of 1-for-200 that became effective April 21, 2025, the reverse stock split of the common stock at a ratio of 1-for-50 that became effective October 17, 2024 and the reverse stock split of the common stock at a ratio of 1-for-15 that became effective June 12, 2024. See Note 1, "Nature of Operations," for further details.
The accompanying notes are an integral part of the condensed consolidated financial statements.

‎

SUNATION ENERGY, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIT)
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN REDEEMABLE CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS' EQUITY (DEFICIT)
(Unaudited)
For the Three Months Ended March 31, 2025
For the Six Months Ended June 30, 2025
	Redeemable Convertible			Series A Convertible			Series DB			Series D			~~Additional~~					Additional
	Preferred Stock			Preferred Stock			Preferred Stock			~~Common~~Preferred Stock			~~Paid-in~~Common Stock			~~Accumulated~~		Paid-in			Accumulated
	Shares	Amount		Shares	Amount		Shares	Amount		Shares~~(1)~~	Amount~~(1)~~		~~Capital~~Shares(1)		Amount(1)	~~Deficit~~		Capital(1)	~~Total~~		Deficit		Total
BALANCE AT DECEMBER 31, 2024	—	$	—	—	$	—	—	$	—	~~9,343~~—	$	~~467~~—	$9,343	~~51,445,995~~	$	$467	~~(42,899,046)~~	$	$51,445,995	~~8,547,416~~	$	(42,899,046)	$	8,547,416
Net loss	—		—	—		—	—		—	—		—	—	—		—	~~(3,496,432)~~		—	~~(3,496,432)~~		(13,103,847)		(13,103,847)
Issuance of common stock under Equity Incentive Plan	—		—	—		—	—		—	4—		—	4	—		—	—		—	—		—		—
Issuance of common stock under registered direct offering, net of issuance costs	—		—	—		—	—		—	~~9,825~~—		~~492~~—	31,564	~~8,481,400~~		1,578	—		8,697,706	~~8,481,892~~		—		8,699,284
Issuance of common stock under pre-funded warrant exercises	—		—	—		—	—		—	~~55,392~~—		~~2,770~~—	55,392	~~8,308~~		2,770	—		8,308	~~11,078~~		—		11,078
Issuance of Series D Preferred Stock	—		—	—		—	1		1	—		—		(1)			—			—
Issuance of common stock under Series B warrant exercises	—		—	—		—	—		—	—		—	3,260,870			163,044			16,499,663			—		16,662,707
Issuance of common stock on At-the-Market sales, net of issuance costs	—		—	—		—	—		—	762		37		351,335			—			351,372
Issuance of Series D Preferred Stock	—		—	—		—	—		—	1		1	—			—			(1)			—		—
Issuance of common stock on settlement of loss contingencies	—		—	—		—	—		—	6,065		304		880,452			—			880,756
Cancellation of Series D Preferred Stock	—		—	—		—	—		—	(1)		(1)	—			—			1			—		—
Share based compensation	—		—	—		—	—		—	—		—		30,815			—			30,815
Issuance of common stock on At-the-Market sales, net of issuance costs	—		—	—		—	—		—	—		—	762			37			351,335			—		351,372
BALANCE AT MARCH 31, 2025	—	$	—	—	$	—	1	$	1	81,391	$	4,070	$	61,198,304		$	(46,395,478)		$	14,806,897
Issuance of common stock on settlement of loss contingencies	—		—	—		—	—		—	—		—	6,065			304			880,452			—		880,756
Effect of reverse stock splits	—		—	—		—	—		—	—		—	42,614			2,131			(2,131)			—		—
Share based compensation	—		—	—		—	—		—	—		—	—			—			53,276			—		53,276
BALANCE AT JUNE 30, 2025	—	$	—	—	$	—	—	$	—	—	$	—	3,406,614		$	170,331		$	77,934,604		$	(56,002,893)	$	22,102,042

For the Three Months Ended March 31, 2024
For the Three Months Ended June 30, 2025
	Redeemable Convertible			Series A ~~Convertible~~			Series DB				Series D			~~Additional~~					Additional
	Preferred Stock			Preferred Stock			Preferred Stock				~~Common~~Preferred Stock			~~Paid-in~~Common Stock			~~Accumulated~~		Paid-in			Accumulated
	Shares	Amount		Shares	Amount		Shares	Amount			Shares~~(1)~~	Amount~~(1)~~		~~Capital~~Shares(1)		Amount(1)	~~Deficit~~		Capital(1)	~~Total~~		Deficit		Total
BALANCE AT DECEMBER 31, 2023	—	$	—	28,000	$	28,000	—	$	—		68	$	3	$	47,490,197		$	(27,081,411)		$	20,436,789
BALANCE AT MARCH 31, 2025	—	$	—	—	$	—	—	$	—		1	$	1	81,391		$	4,070		$	61,198,304		$	(46,395,478)	$	14,806,897
Net loss	—		—	—		—	—		—		—		—	—	—		—	~~1,202,651~~		—	~~1,202,651~~		(9,607,415)		(9,607,415)
Issuance of common stock under Employee Stock Purchase Plan	—		—	—		—	—		—		—		—		1,040			—			1,040
Issuance of common stock under registered direct offering, net of issuance costs	—		—	—		—	—		—		—		—	21,739			1,086			216,306			—		217,392
Issuance of common stock under Equity Incentive Plan	—		—	—		—	—		—		1		—		—			—			—
Issuance of common stock under Series B warrant exercises	—		—	—		—	—		—		—		—	3,260,870			163,044			16,499,663					16,662,707
Issuance of common stock under registered direct offering, net of issuance costs	—		—	—		—	—		—	—	18	—	1		918,987			—			918,988
Cancellation of Series D Preferred Stock	—		—	—		—	—		—		(1)		(1)	—			—			1			—		—
Reclassification of Series A Preferred Stock to temporary equity	28,000		30,968,875	(28,000)		(28,000)	—		—	—	—	—	—		(30,940,875)			—			(30,968,875)
Effect of reverse stock splits	—		—	—		—	—		—		—		—	42,614			2,131			(2,131)			—		—
Deemed dividend on extinguishment of Convertible Preferred Stock	—		751,125	—		—	—		—	—	—	—	—		(751,125)			—			(751,125)
Share based compensation	—		—	—		—	—		—		—		—	—			—			22,461			—		22,461
Reclassification of PIPE Warrants to liabilities	—		—	—		—	—		—	—	—	—	—		(10,592,220)			—			(10,592,220)
BALANCE AT JUNE 30, 2025	—	$	—	—	$	—	—	$	—		—	$	—	3,406,614		$	170,331		$	77,934,604		$	(56,002,893)	$	22,102,042
Conversion of Redeemable Convertible Preferred Stock to Common Stock	(7,403)		(8,386,387)	—		—	—		—	—	343	—	17		8,386,370			—			8,386,387
Share based compensation	—		—	—		—	—		—		—		—		197,306			—			197,306
Other share retirements	—		—	—		—	—		—		—		—		(31,037)			28,172			(2,865)
BALANCE AT MARCH 31, 2024	20,597	$	23,333,613	—	$	—	—	$	—		430	$	21	$	14,678,643		$	(25,850,588)		$	(11,171,924)

(1) Prior period results have been adjusted to reflect the reverse stock split of the common stock at a ratio of 1-for-200 that became effective April 21, 2025, the reverse stock split of the common stock at a ratio of 1-for-50 that became effective October 17, 2024 and the reverse stock split of the common stock at a ratio of 1-for-15 that became effective June 12, 2024. See Note 1, "Nature of Operations," for further details. The accompanying notes are an integral part of the condensed consolidated financial statements.

‎

SUNATION ENERGY, INC.
For the Six Months Ended June 30, 2024
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
	Redeemable Convertible					Series A Convertible			Series B			Series D							Additional
(Unaudited)
	Preferred Stock					Preferred Stock			Preferred Stock			Preferred Stock				Common Stock			Paid-in		Accumulated
	Three Months Ended March 31
	Shares		Amount			Shares	Amount		Shares	Amount		Shares	Amount			Shares(1)	Amount(1)		Capital(1)		Deficit		Total
	2025			2024
BALANCE AT DECEMBER 31, 2023	—		$	—		28,000	$	28,000	—	$	—	—	$	—		68	$	3	$	47,490,197	$	(27,081,411)	$	20,436,789
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	—			—		—		—	—		—	—		—		—		—		—		(5,731,364)		(5,731,364)
Net (loss) income	$	(3,496,432)		$	1,202,651
Issuance of common stock under Employee Stock Purchase Plan	—			—		—		—	—		—	—		—		1		—		9,772		—		9,772
Adjustments to reconcile net (loss) income to net cash used in operating activities:
Issuance of common stock under Equity Incentive Plan	—			—		—		—	—		—	—		—		2		—		—		—		—
Depreciation and amortization		627,315			801,792
Issuance of common stock under registered direct offering, net of issuance costs	—			—		—		—	—		—	—		—	—	18		1		918,987		—		918,988
Share based compensation		30,815			197,306
Issuance of Series B Preferred Stock	—			—		—		—	1		1	—		—	—	—		—		14		—		15
Credit loss provision		(25,079)			38,501
Issuance of common stock under PIPE Warrant exercise	—			—		—		—	—		—	—		—	—	6		—		324,790		—		324,790
Fair value remeasurement of earnout consideration		—			(350,000)
Reclassification of Series A Preferred Stock to temporary equity	28,000			30,968,875		(28,000)		(28,000)	—		—	—		—	—	—		—		(30,940,875)		—		(30,968,875)
Fair value remeasurement of warrant liability		—			(3,728,593)
Deemed dividend on extinguishment of Convertible Preferred Stock	—			751,125		—		—	—		—	—		—	—	—		—		(751,125)		—		(751,125)
Fair value remeasurement of contingent forward contract		(109,492)			—
Reclassification of PIPE Warrants to liabilities	—			—		—		—	—		—	—		—	—	—		—		(10,592,220)		—		(10,592,220)
Fair value remeasurement of contingent value rights		(19,179)			(376,085)
Conversion of Redeemable Convertible Preferred Stock to Common Stock	(13,485)			(15,277,055)		—		—	—		—	—		—	—	632		32		15,277,023		—		15,277,055
Loss on extinguishment of debt		343,471			—
Gain on sale of assets		—			(6,118)
Interest and accretion expense		571,241			764,870
Changes in assets and liabilities:
Trade accounts receivable		978,228			14,894
Inventories		195,091			641,301
Income taxes		14,615			6,162
Other assets, net		12,186			(184,227)
Accounts payable		(941,847)			(684,194)
Accrued compensation and benefits		20,770			(48,386)
Customer deposits		(443,775)			(293,877)
Other accrued liabilities		(62,478)			(191,396)
Accrued interest		(1,098,799)			(453,881)
Net cash used in operating activities		(3,403,349)			(2,649,280)
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures		—			(5,594)
Proceeds from the sale of property, plant and equipment		—			6,118
Net cash provided by investing activities		—			524
CASH FLOWS FROM FINANCING ACTIVITIES:
Payments against loans payable		(9,401,939)			(372,299)
Payments related to equity issuance costs		(1,568,099)			(81,012)
Proceeds from the issuance of common stock and pre-funded warrants under registered direct offering		9,473,398			1,000,000
Proceeds from the issuance of common stock on the exercise of pre-funded warrants		11,078			—
Proceeds from the issuance of contingent forward contract		5,515,525			—
Proceeds from the issuance of common stock under at-the-market offering		351,372			—
Proceeds from issuance of common stock, net of shares withheld		—			1,040
Payment of contingent consideration related to acquisition		(389,104)			—
Purchase of common stock		—			(2,865)
Net cash provided by financing activities		3,992,231			544,864
NET INCREASE (DECREASE) IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH		588,882			(2,103,892)
CASH, CASH EQUIVALENTS AND RESTRICTED CASH AT BEGINNING OF PERIOD		1,151,348			5,396,343
CASH, CASH EQUIVALENTS AND RESTRICTED CASH AT END OF PERIOD	$	1,740,230		$	3,292,451
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Interest paid	$	1,077,033		$	416,504
NONCASH FINANCING AND INVESTING ACTIVITIES:
Loss on extinguishment of debt		(343,471)			—

Issuance of common stock for the settlement of loss contingencies		880,756			—
Cash in lieu payment on fractional shares under reverse stock split	—			—		—		—	—		—	—		—	—	—		—		(1,132)		—		(1,132)
Deemed dividend on Convertible Preferred Stock and PIPE Warrants		—			11,322,639
Share based compensation	—			—		—		—	—		—	—		—	—	—		—		185,723		—		185,723
Conversion of redeemable convertible preferred stock to common stock		—			8,386,387
Other share retirements	—			—		—		—	—		—	—		—	—	—		—		(38,268)		32,170		(6,098)
The accompanying notes are an integral part of the condensed consolidated financial statements.
Other comprehensive income	—			—		—		—	—		—	—		—	—	—		—		—		—		—
BALANCE AT JUNE 30, 2024	14,515		$	16,442,945		—	$	—	1	$	1	—	$	—		727	$	36	$	21,882,886	$	(32,780,605)	$	(10,897,682)

‎


For the Three Months Ended June 30, 2024

	Redeemable Convertible			Series A Convertible			Series B			Series D						Additional
	Preferred Stock			Preferred Stock			Preferred Stock			Preferred Stock			Common Stock			Paid-in		Accumulated
	Shares	Amount		Shares	Amount		Shares	Amount		Shares	Amount		Shares⁽¹⁾	Amount⁽¹⁾		Capital⁽¹⁾		Deficit		Total
BALANCE AT MARCH 31, 2024	20,597	$	23,333,613	—	$	—	—	$	—	—	$	—	430	$	21	$	14,678,643	$	(25,850,588)	$	(11,171,924)
Net loss	—		—	—		—	—		—	—		—	—		—		—		(6,934,015)		(6,934,015)
Issuance of common stock under Employee Stock Purchase Plan	—		—	—		—	—		—	—		—	1		—		8,732		—		8,732
Issuance of common stock under Equity Incentive Plan	—		—	—		—	—		—	—		—	1		—		—		—		—
Issuance of Series B Preferred Stock	—		—	—		—	1		1	—		—	—		—		14		—		15
Issuance of common stock under PIPE Warrant exercise	—		—	—		—	—		—	—		—	6		—		324,790		—		324,790
Conversion of Redeemable Convertible Preferred Stock to Common Stock	(6,082)		(6,890,668)	—		—	—		—	—		—	289		15		6,890,653		—		6,890,668
Cash in lieu payment on fractional shares under reverse stock split	—		—	—		—	—		—	—		—	—		—		(1,132)		—		(1,132)
Share based compensation	—		—	—		—	—		—	—		—	—		—		(11,583)		—		(11,583)
Other share retirements	—		—	—		—	—		—	—		—	—		—		(7,231)		3,998		(3,233)
BALANCE AT JUNE 30, 2024	14,515	$	16,442,945	—	$	—	1	$	1	—	$	—	727	$	36	$	21,882,886	$	(32,780,605)	$	(10,897,682)


(1) Prior period results have been adjusted to reflect the reverse stock split of the common stock at a ratio of 1-for-200 that became effective April 21, 2025, the reverse stock split of the common stock at a ratio of 1-for-50 that became effective October 17, 2024 and the reverse stock split of the common stock at a ratio of 1-for-15 that became effective June 12, 2024. See Note 1, "Nature of Operations," for further details.

The accompanying notes are an integral part of the condensed consolidated financial statements.

‎


SUNATION ENERGY, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)

	Six Months Ended June 30
	2025		2024
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$	(13,103,847)	$	(5,731,364)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization		1,252,744		1,588,564
Share based compensation		53,276		185,723
Credit loss provision		(19,316)		65,864
Fair value remeasurement of earnout consideration		—		(800,000)
Fair value remeasurement of warrant liability		7,531,044		(461,022)
Fair value remeasurement of embedded derivative liability		—		1,055,600
Fair value remeasurement of contingent forward contract		(899,080)		—
Fair value remeasurement of contingent value rights		(25,450)		(492,860)
Loss on extinguishment of debt		343,471		—
Gain on sale of assets		—		(6,118)
Interest and accretion expense		212,592		1,500,503
Changes in assets and liabilities:
Trade accounts receivable		1,601,897		202,476
Inventories		385,677		327,540
Income taxes		(20,847)		(69,971)
Other assets, net		534,878		(264,877)
Accounts payable		(489,960)		822,503
Accrued compensation and benefits		403,470		(436,080)
Customer deposits		(336,485)		(774,524)
Other accrued liabilities		(323,130)		758,737
Accrued interest		(634,467)		(896,420)
Net cash used in operating activities		(3,533,533)		(3,425,726)
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures		(8,817)		(17,579)
Proceeds from the sale of property, plant and equipment		—		6,118
Net cash used in investing activities		(8,817)		(11,461)
CASH FLOWS FROM FINANCING ACTIVITIES:
Payments against loans payable		(8,514,664)		(748,647)
Payments against related party loans payable		(1,038,279)		—
Payments related to debt issuance costs		(38,613)		—
Payments related to equity issuance costs		(2,128,038)		(81,012)
Proceeds from the issuance of common stock and pre-funded warrants under registered direct offering		9,690,790		1,000,000
Proceeds from the issuance of common stock on the exercise of pre-funded warrants		11,078		—
Proceeds from the issuance of Series A and Series B warrants		10,298,134		—
Proceeds from the issuance of common stock under at-the-market offering		351,372		—
Proceeds from the issuance of Series B preferred stock		—		15
Payments for the termination of Series A warrants		(267,391)		—
Proceeds from issuance of common stock, net of shares withheld		—		9,773
Cash in lieu payment on fractional shares under reverse stock split		—		(1,132)
Payment of contingent consideration related to acquisition		(2,500,000)		—
Purchase of common stock		—		(6,098)
Net cash provided by financing activities		5,864,389		172,899

NET INCREASE (DECREASE) IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH		2,322,039		(3,264,288)
CASH, CASH EQUIVALENTS AND RESTRICTED CASH AT BEGINNING OF PERIOD		1,151,348		5,396,343
CASH, CASH EQUIVALENTS AND RESTRICTED CASH AT END OF PERIOD	$	3,473,387	$	2,132,055

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Income taxes paid	$	49,698	$	69,500
Interest paid		1,139,593		821,306
NONCASH FINANCING AND INVESTING ACTIVITIES:
Issuance of common stock for the settlement of loss contingencies		880,756		—
Deemed dividend on Convertible Preferred Stock and PIPE Warrants		—		11,322,639
Conversion of redeemable convertible preferred stock to common stock		—		15,277,055

The accompanying notes are an integral part of the condensed consolidated financial statements.

‎

SUNATION ENERGY, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

NOTE 1 – NATURE OF OPERATIONS

Description of Business

SUNation Energy, Inc. (~~formerly Communications Systems, Inc., Pineapple Holdings, Inc., and Pineapple Energy Inc.) (~~“SUNE”, “SUNation Energy”, “we” or the “Company”), ~~was~~is ~~originally organized as~~ a ~~Minnesota~~Delaware corporation ~~in 1969. On March 28~~, ~~2022,~~whose ~~the~~shares ~~Company completed its previously announced merger transaction with Pineapple Energy LLC (“Pineapple Energy”) in accordance with the terms~~ of ~~that~~Common ~~certain~~Stock ~~Agreement~~are ~~and~~listing ~~Plan~~on ~~of Merger dated March 1, 2021, as amended by an Amendment No. 1 to Merger Agreement dated December 16, 2021 (collectively~~ the ~~“merger~~Nasdaq ~~agreement”),~~Stock byMarket ~~and~~under ~~among~~its ~~the~~trading ~~Company,~~symbol ~~Helios Merger Co., a Delaware corporation and a wholly-owned subsidiary of the Company (the~~ “~~Merger Sub~~SUNE”~~), Pineapple Energy LLC, a Delaware limited liability company, Lake Street Solar LLC as the Members’ Representative, and Randall D~~. Sampson as the Shareholders’ Representative, pursuant to which Merger Sub merged with and into Pineapple Energy, with Pineapple Energy surviving the merger as a wholly-owned subsidiary of the Company (the “merger”). Following the closing of the merger (the “Closing”) the Company changed its name from Communications Systems, Inc. to Pineapple Holdings, Inc. and commenced doing business using the Pineapple name, and subsequently, on April 13, 2022, changed its name to Pineapple Energy Inc.

On November 14, 2024, the Company filed articles of conversion with the Secretary of State of the State of Minnesota and filed a certificate of conversion with the Secretary of State of the State of Delaware changing its jurisdiction of incorporation from Minnesota to Delaware (the “Reincorporation”), as well as having filed a Certificate of Incorporation with the Secretary of State of the State of Delaware on this same date. In addition to the Reincorporation, the Company effectuated a change to its name from Pineapple Energy Inc. to SUNation Energy, Inc. (the “Name Change”) and a change to its stock trading symbol from PEGY to SUNE, which Name Change and stock symbol change was effective November 19, 2024.

SUNation Energy’s vision is to power the energy transition through grass-roots growth of solar electricity paired with battery storage. The Company is a domestic operator and consolidator of residential solar, battery storage, and grid services solutions. Our strategy is focused on acquiring, integrating, and growing leading local and regional solar, storage, and energy services companies nationwide.

Our current business units, Hawaii Energy Connection, LLC (“HEC”), and New York-based subsidiaries, the SUNation entities (collectively, “SUNation”) are engaged in the design, installation, and maintenance of solar energy systems across residential, commercial, and municipal sectors. Our team specializes in providing tailored solar solutions that meet the specific energy needs of each client, ensuring both efficiency and sustainability. In addition to our core solar services, we also offer energy storage systems to optimize energy use and increase reliability. Our New York business unit further integrates a broader range of services, including residential roofing solutions, to ensure seamless solar installations and long-term durability. Additionally, we provide community solar services that allow groups of individuals, businesses, or organizations to share the benefits of a single solar array, making renewable energy accessible to more people in the community.

Reverse Stock Splits

June 2024 Reverse Stock Split

On January 3, 2024, the Company’s shareholders approved a reverse stock split of the Company’s common stock at a ratio within a range of 1-for-2 and 1-for-15 and granted the Company’s board of directors the discretion to determine the timing and ratio of the split within such range.

On May 28, 2024, the Company’s board of directors determined to effect the reverse stock split of the common stock at a 1-for-15 ratio (the “June Reverse Stock Split”) and approved an amendment (“June Reverse Stock Split Amendment”) to the Fourth Amended and Restated Articles of Incorporation of the Company to effect the June Reverse Stock Split.

Effective June 12, 2024, the Company amended its Fourth Amended and Restated Articles of Incorporation to implement the June Reverse Stock Split. The Company's common stock began trading on a split-adjusted basis when the market opened on June 12, 2024 (the "June Effective Date").

As a result of the June Reverse Stock Split on the June Effective Date, every 15 shares of common stock then issued and outstanding automatically were combined into one share of common stock, with no change in par value per share. No fractional shares were outstanding following the June Reverse Stock Split, and any fractional shares that would have resulted from the June Reverse Stock Split were settled in cash. The number of shares of common stock outstanding was reduced from 108,546,773 to 7,235,731, with 720.901 fractional shares paid out in cash totaling $1,132. The total number of shares authorized for issuance was reduced to 7,500,000 in proportion to the June Reverse Stock Split ratio.
‎

October 2024 Reverse Stock Split

On July 19, 2024, the Company’s shareholders approved a reverse stock split of the Company’s common stock at a ratio within a range of 1-for-2 and 1-for-200 and granted the Company’s board of directors the discretion to determine the ~~timing and ratio of the split within such range. Additionally, the shareholders also approved an increase in authorized shares to 133,333,333 shares.~~

timing and ratio of the split within such range. Additionally, the shareholders also approved an increase in authorized shares to 133,333,333 shares.

On October 1, 2024, the Company’s board of directors determined to effect the reverse stock split of the common stock at a 1-for-50 ratio (the “October Reverse Stock Split”) and approved an amendment (“October Reverse Stock Split Amendment”) to the Fourth Amended and Restated Articles of Incorporation of the Company to effect the October Reverse Stock Split.

Effective October 17, 2024, the Company amended its Fourth Amended and Restated Articles of Incorporation to implement the October Reverse Stock Split. The Company's common stock began trading on a split-adjusted basis when the market opened on October 17, 2024 (the "October Effective Date").

As a result of the October Reverse Stock Split on the October Effective Date, every 50 shares of common stock then issued and outstanding automatically were combined into one share of common stock, with no change in par value per share. No fractional shares were outstanding following the Reverse Stock Split, and any fractional shares that would have resulted from the October Reverse Stock Split were settled in cash. The number of shares of common stock outstanding was reduced from 67,260,696 to 1,344,841, with 372.92 fractional shares payable in cash totaling $1,891. The total number of shares authorized for issuance was reduced from 133,333,333 to 2,666,667 in proportion to the October Reverse Stock Split ratio.

April 2025 Reverse Stock Split

On April 3, 2025, the Company’s shareholders approved a reverse stock split of the Company’s common stock at a ratio within a range of 1-for-2 and 1-for-200 and granted the Company’s board of directors the discretion to determine the timing and ratio of the split within such range. Additionally, the shareholders also approved an increase in authorized shares to 1,000,000,000 shares.

On April 9, 2025, the Company’s board of directors determined to effect the reverse stock split of the common stock at a 1-for-200 ratio (the “April Reverse Stock Split”) and approved an amendment (“April Reverse Stock Split Amendment”) to its Certificate of Incorporation to effect the April Reverse Stock Split.

On April 16, 2025, the Company amended its Certificate of Incorporation to implement the April Reverse Stock Split. The Company's common stock began trading on a split-adjusted basis when the market opened on April 21, 2025 (the "April Effective Date").

As a result of the April Reverse Stock Split on the April Effective Date, every 200 shares of common stock then issued and outstanding automatically were combined into one share of common stock, with no change in par value per share. No fractional shares were outstanding following the April Reverse Stock Split, and any fractional shares that would have resulted from the April Reverse Stock Split were rounded up to the nearest whole share. The number of shares of common stock outstanding was reduced from 672,799,910 to 3,406,614.

~~Effective~~The aseffects of the ~~same time as the~~ June 2024 Reverse Stock Split, October 2024 Reverse Stock Split, and April 2025 Reverse Stock Split (collectively, ~~known as~~ the “Reverse Stock Splits”) have been applied retroactively and are reflected in this Quarterly Report on Form 10-Q for all periods presented. Following each of the Reverse Stock Splits, the number of shares of common stock available for issuance under the Company's equity compensation plans were automatically reduced in proportion to the Reverse Stock Splits ratio. Upon effectiveness, the Reverse Stock Splits also resulted in reductions in the number of shares of common stock issuable upon exercise or vesting of equity awards in proportion to the Reverse Stock Splits ratios and caused a proportionate increase in exercise price or share-based performance criteria, if any, applicable to such awards.

The effects of the Reverse Stock Splits have been reflected in this Quarterly Report on Form 10-Q for all periods presented.

Impact of the Reverse Stock Splits

The impact of the Reverse Stock Splits was applied retroactively for all periods presented in accordance with applicable guidance. Therefore, prior period amounts are different than those previously reported.

The following table illustrates changes in common stock (in number of shares and dollar amount) and additional paid-in-capital, as previously reported prior to, and as adjusted subsequent to, the impact of the Reverse Stock Splits retroactively adjusted for the periods presented:

March 31, 2024

June 30, 2024

As Previously Reported

Impact of Reverse Stock Split

As Adjusted

Common Stock shares

647,~~154~~243,~~286~~258

(647,~~153~~242,~~856~~531)

~~430~~727

Common Stock amount

3362,~~207,714~~163

(3362,~~207,693~~127)

2136

Additional Paid-in-Capital

1121,~~470~~520,~~950~~759

3362,~~207,693~~127

1421,~~678~~882,~~643~~886


		December 31, 2023						December 31, 2024
		As Previously Reported		Impact of Reverse Stock Split		As Adjusted		As Previously Reported		Impact of Reverse Stock Split		As Adjusted
Common Stock shares		13,663		(13,595)		68		1,868,638		(1,859,295)		9,343
Common Stock amount	$	683	$	(680)	$	3	$	93,432	$	(92,965)	$	467
Additional Paid-in-Capital	$	47,489,517	$	680	$	47,490,197	$	51,353,030	$	92,965	$	51,445,995

The following table illustrates changes in loss per share and weighted average shares outstanding, as previously reported prior to, and as adjusted subsequent to, the impact of the Reverse Stock Splits retroactively adjusted for the periods presented:


		Three Months Ended June 30, 2024
		As Previously Reported		Impact of Reverse Stock Split		As Adjusted
Weighted average shares outstanding - basic and diluted		6,269,514		(6,268,885)		629
Loss per share from continuing operations - basic and diluted	$	(1.11)	$	(11,021.80)	$	(11,022.91)

		Three Months Ended March 31, 2024
		Six Months Ended June 30, 2024
		As Previously Reported		Impact of Reverse Stock Split		As Adjusted
Weighted average shares outstanding - basic and diluted		394,~~410~~448,~~206~~431		(394,~~409~~447,~~943~~985)		~~263~~446
Loss per share from continuing operations - basic and diluted	$	(03.2683)	$	(38,~~414~~212.5866)	$	(38,~~414~~216.8449)

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The accompanying condensed consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”) and include the accounts of the Company and its wholly owned operating subsidiaries. Any reference in these notes to applicable guidance is meant to refer to the authoritative GAAP as found in the Accounting Standards Codification (“ASC”) and Accounting Standards Update (“ASU”) of the Financial Accounting Standards Board (“FASB”).

Certain information and footnote disclosures normally included in consolidated financial statements prepared in accordance with GAAP have been condensed or omitted. In the opinion of management, the accompanying condensed consolidated financial statements include all adjustments, consisting of only normal recurring adjustments, necessary for a fair statement of the results for the interim periods presented. The condensed consolidated financial statements and notes thereto should be read in conjunction with the Company’s audited financial statements and notes thereto for the year ended December 31, 2024 included on the Company’s Annual Report on Form 10-K, as filed with the Securities and Exchange Commission (“SEC”) on April 15, 2025. The accompanying condensed consolidated balance sheet at December 31, 2024 has been derived from the audited balance sheet at December 31, 2024 contained in the above-referenced Form 10-K. Results of operations for interim periods are not necessarily indicative of the results of operations for a full year.

Principles of Consolidation

The condensed consolidated financial statements include the accounts of the Company and its subsidiaries. All intercompany transactions and accounts have been eliminated.

Use of Estimates

The presentation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. The Company uses estimates based on the best information available in recording transactions and balances resulting from operations. Actual results could materially differ from those estimates. The Company’s estimates consist principally of allowances for credit losses, revenue recognition on commercial projects based on percentage of completion, asset impairment evaluations, accruals for compensation plans, lower of cost or ~~market~~net realizable value, inventory adjustments, fair value measurements, provisions for income taxes and deferred taxes, depreciable lives of fixed assets, and amortizable lives of intangible assets.

Cash, Restricted Cash and Cash Equivalents

For purposes of the condensed consolidated statements of cash flows, the Company considers all highly liquid investments with a maturity of three months or less at the time of purchase to be cash equivalents. The Company may invest in short-term money market funds that are not considered to be bank deposits and are not insured or guaranteed by the federal deposit insurance company (“FDIC”) or other government agency. These money market funds seek to preserve the value of the investment at $1.00 per share; however, it is possible to lose money investing in these funds. Total cash equivalents invested in short-term money market funds was $~~370~~1,~~986~~535,022 and $368,138 as of ~~March~~June 3130, 2025 and December 31, 2024, respectively. The $~~292~~286,~~901~~630 of restricted cash and cash equivalents on the balance sheet as of ~~March~~June 3130, 2025 are funds that can only be used to support the legacy Communications Systems, Inc. (“CSI”) business (which had merged with and into Pineapple Energy, Inc. in March 2022 (and Pineapple Energy, Inc.’s name was changed to SUNation Energy Inc. in November 2024, each as previously disclosed and described more fully in prior annual and quarterly reports)), and will be distributed to holders of the Company’s contingent value rights (“CVRs”) and cannot be used to support the working capital needs of the SUNation Energy business.

contingent value rights (“CVRs”) and cannot be used to support the working capital needs of the SUNation Energy business.

Accounts Receivable, Net

Accounts receivable are recorded at their net realizable value and are not collateralized. Accounts receivable include amounts earned less payments received and allowances for credit losses. Management continually monitors and adjusts its allowances associated with the Company’s receivables to address any credit risks associated with the accounts receivable and periodically writes off receivables when collection is not considered probable. The Company does not charge interest on past due accounts. When uncertainty exists as to the collection of receivables, the Company records an allowance for credit losses and a corresponding charge to credit loss expense.

Inventories, Net

Inventories, which consist primarily of materials and supplies used in the installation of solar systems, are stated at the lower of cost or net realizable value, with costs computed on a weighted average cost basis. The Company periodically reviews its inventories for excess and obsolete items and adjusts carrying costs to estimated net realizable values when they are determined to be less than cost. The inventory reserve was $~~215~~254,~~584~~472 and $226,439 at ~~March~~June 3130, 2025 and December 31, 2024, respectively.

Property, Plant and Equipment, net

Property, plant and equipment are recorded at cost. Depreciation is computed using the straight-line method. Maintenance and repairs are charged to operations and additions or improvements are capitalized. Items of property sold, retired or otherwise disposed of are removed from the asset and accumulated depreciation accounts and any gains or losses on disposal are reflected in the condensed consolidated statements of operations.

Goodwill and Other Intangible Assets, net

Goodwill represents the amount by which the purchase prices (including liabilities assumed) of acquired businesses exceed the estimated fair value of the net tangible assets and separately identifiable intangible assets of these businesses. Definite lived intangible assets, consisting primarily of trade names and technology, are amortized on a straight-line basis over the estimated useful life of the asset. Goodwill is not amortized but is tested at least annually for impairment. The Company reassesses the value of our reporting units and related goodwill balances annually on October 1 and at other times if events have occurred or circumstances exist that indicate the carrying amount of goodwill may not be recoverable.

On July 4, 2025, the President signed H.R. 1, the “One Big Beautiful Bill Act,” into law, which accelerates the phase-outs and terminations of various eligible tax credits enacted as part of the Inflation Reduction Act and places restrictions on continued receipt of tax credits by specified foreign entities and foreign influenced entities. The reduction, elimination or expiration of government incentives for, or regulations mandating the use of, as well as corporate commitments to the use of renewable energy and solar energy specifically could reduce demand for solar energy systems and harm our business, financial condition and results of operations. The Company is currently evaluating the impact on the consolidated financial statements and notes there may be uncertainty around the recoverability of certain intangible or long-lived assets.

Recoverability of Long-Lived Assets and Intangible Assets

The Company reviews its long-lived assets and definite lived intangible assets for impairment whenever events or changes in circumstances indicate that the carrying amounts of the assets may not be fully recoverable. If indicators of impairment exist, management identifies the asset group that includes the potentially impaired long-lived asset, at the lowest level at which there are separate, identifiable cash flows. If the fair value, determined as the total of the expected undiscounted future net cash flows for the asset group is less than the carrying amount of the asset, a loss is recognized for the difference between the fair value and carrying amount of the asset.

Mezzanine Equity

The Company has issued various financial instruments, including preferred stock. Instruments containing redemption rights that are either within the control of the holder or subject to redemption upon the occurrence of uncertain events not solely within the Company’s control are classified as redeemable or mezzanine equity. The purpose of this classification is to convey that such a security may not be permanently part of equity and could result in a demand for cash, securities or other assets of the entity in the future.

Warrants

The Company accounts for warrants as either equity-classified or liability-classified instruments based on an assessment of the warrant’s specific terms and applicable authoritative guidance, ASC 480 “Distinguishing Liabilities from Equity” and ASC 815, “Derivatives and Hedging.” Management’s assessment considers whether the warrants are freestanding financial instruments pursuant to ASC 480, whether they meet the definition of a liability pursuant to ASC 480, and whether the warrants meet all of the requirements for equity classification under ASC 815.

financial instruments pursuant to ASC 480, whether they meet the definition of a liability pursuant to ASC 480, and whether the warrants meet all of the requirements for equity classification under ASC 815.

For issued or modified warrants that do not meet all the criteria for equity classification, such warrants are required to be recorded as a liability initially at their fair value on the date of issuance, and subsequently remeasured to fair value on each balance sheet date thereafter. Changes in the estimated fair value of liability-classified warrants are recognized in other income (expense) in the condensed consolidated statements of operations in the period of change.

Derivative Liabilities

The Company evaluates its contracts to determine if those contracts qualify as derivatives under ASC 815. For derivative financial instruments that are accounted for as liabilities, including the Company’s contingent forward contract, the derivative instrument is initially recorded at its fair value and is then subsequently remeasured to fair value on each balance sheet date thereafter. Any changes in fair value are recorded in other income (expense) in the condensed consolidated statements of operations in the period of change.

Revenue Recognition

Revenue is recognized when there is a transfer of control of promised goods or services to customers in an amount that reflects the consideration that the Company expects to be entitled to in exchange for those goods or services. The Company sells solar power systems under construction and development agreements to residential and commercial customers. The completed system is sold as a single performance obligation. For residential contracts, revenue is recognized at the point-in-time when the systems are placed into service. Any advance payments received in the form of customer deposits are recorded as contract liabilities.

Commercial contracts are generally completed within three to twelve months from commencement of construction. Construction on large projects may be completed within eighteen to twenty-four months, depending on the size and location of the project. Revenues from commercial contracts are recognized under a percentage of completion method, measured by the percentage of hours incurred to date against estimated total hours budgeted for each contract. Because of inherent uncertainties in estimating costs, it is at least reasonably possible that the estimates used will change within the near future. Contract costs include all direct material, labor costs and those indirect costs related to contract performance, such as indirect labor and other supplies. Selling, general and administrative costs are charged to expense as incurred. Provisions for estimated losses on uncompleted contracts are made in the period in which such losses are determined. Changes in job performance, job conditions and estimated profitability may result in revisions to costs and revenues which are recognized in the period in which the revisions are determined. Changes in estimated job profitability resulting from job performance, job conditions, contract penalty provisions, claims, change orders, and settlements, are accounted for as changes in estimates in the current period.

Gross Excise Tax

The State of Hawaii imposes a gross receipts tax on all business operations done in Hawaii. The Company records the tax revenue and expense on a gross basis.

Cost of Sales

Cost of sales consists of direct and indirect material and labor costs for solar energy system installations as well as warranty costs, permitting fees, financing fees and overhead, including costs related to procurement, warehousing and inventory management.

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Share-Based Compensation

The Company accounts for share-based compensation awards on a fair value basis. The estimated grant date fair value of each stock-based award is recognized in the condensed consolidated statements of operations over the requisite service period (generally the vesting period). The Company recognizes forfeitures as they occur.

Warranty

SUNation offers product warranties for various periods against defects in material or installation workmanship. The manufacturers of the solar panels and the inverters provide a warranty period of generally 25 years and 10 years, respectively. SUNation will assist its customers in the event that the manufacturers' warranty needs to be used to replace a defective solar panel or inverter. SUNation provides for warranty up to the lifetime of the system on the installation of a system and all equipment and incidental supplies other than solar panels and inverters that are recovered under the manufacturers' warranty. SUNation provides extended workmanship warranties to the customer for up to 25 years for the service of inverters, which is reimbursed by the manufacturer.

The Company estimates its warranty obligations upon installation, an expense included in cost of sales, based on management’s best estimate of the probable cost to be incurred in honoring its warranty commitment.

Segment Information

Operating segments are defined as components of an enterprise for which separate financial information is available and evaluated regularly by the chief operating decision maker, or decision-making group, in deciding the method to allocate resources and assess performance. Our chief operating decision maker (“CODM”) is a committee comprised of our chief executive officer, chief operating officer and chief financial officer. Based on the financial information presented to and reviewed by our CODM in deciding how to allocate resources and in assessing performance, we have determined we have two operating and reportable segments.

Net Loss Per Share

Basic net loss attributable to common shareholders per common share is based on the weighted average number of common shares outstanding during each period. Diluted net loss attributable to common shareholders per common share adjusts for the dilutive effect of potential common shares outstanding. The Company had $11,322,639 in deemed dividends during the ~~three~~six months ended ~~March~~June 3130, 2024, which decreases the numerator in the net loss per share calculation. The Company’s only potential additional common shares outstanding are common shares that would result from the conversion of the convertible preferred shares, warrants, convertible debt and shares associated with the long-term incentive compensation plans, which resulted in no dilutive effect for the three and six months ended ~~March~~June 3130, 2025 and ~~March~~June 3130, 2024. The Company calculates the dilutive effect of outstanding warrants and unvested shares using the treasury stock method and the dilutive effect of outstanding preferred shares and convertible debt using the if-converted method. There were no options or deferred stock awards excluded from the calculation of diluted earnings per share because there were no outstanding options or deferred stock awards as of both ~~March~~June 3130, 2025 and 2024. Warrants totaling 0 and 1,~~570~~557 and restricted stock units totaling 5 and 64 would have been excluded from the calculation of diluted earnings per share for the ~~three~~six months ended ~~March~~June 3130, 2025 and 2024, respectively, even if there had not been a net loss in those periods, because the exercise price was greater than the average market price of common stock during the period.

Accounting Standards Issued

In October 2023, the FASB issued ASU 2023-06, “Disclosure Improvements: Codification Amendments in Response to the SEC’s Disclosure Update and Simplification Initiative,” which is intended to clarify or improve disclosure and presentation requirements of a variety of topics. Many of the amendments will allow users to more easily compare entities subject to the SEC’s existing disclosures with those entities that were not previously subject to the requirements and align the requirements in the FASB accounting standard codification with the SEC’s regulations. The amendments in ASU 2023-06 will become effective on the date the related disclosures are removed from Regulation S-X or Regulation S-K by the SEC, and will no longer be effective if the SEC has not removed the applicable disclosure requirement by June 30,

1518

2027. Early adoption is prohibited. The Company is currently evaluating this ASU and the impact it may have on its consolidated financial statements.

In December 2023, the FASB issued ASU 2023-09, “Income Taxes (Topic 740): Improvements to Income Tax Disclosures,” which expands disclosures in an entity’s income tax rate reconciliation table and regarding cash taxes paid both in the U.S. and foreign jurisdictions. This ASU is effective for fiscal periods beginning after December 15, 2024, with early adoption permitted. The Company isdiscloses ~~currently~~its ~~evaluating~~income ~~this~~tax ~~ASU~~rate reconciliation in its annual financial statements only and does not expect the ~~impact~~adoption itof this ~~may~~ASU to have a material impact on its ~~consolidated~~ financial statements.

In November 2024, the FASB issued ASU 2024-03, “Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses”, which requires disclosure in the notes to the financial statements of specified information about certain costs and expenses. The amendments are effective for fiscal years beginning after December 15, 2026, and for interim periods within fiscal years beginning after December 15, 2027. Early adoption is permitted. The amendments should be applied either prospectively to financial statements issued for reporting periods after the effective date of this ASU or retrospectively to any or all prior periods presented in the financial statements. The Company is currently evaluating this ASU and the impact it may have on its consolidated financial statements.

In November 2024, the FASB issued ASU 2024-04, “Debt with Conversion and Other Options,” which clarifies the requirements for determining whether certain settlements of convertible debt instruments should be accounted for as an induced conversion. This ASU is effective for annual periods beginning after December 15, 2025, and interim reporting periods within those annual report periods. Early adoption is permitted for all entities that have adopted the amendments in ASU Update 2020-06. Adoption can be on a prospective or retrospective basis. The Company is currently evaluating this ASU and the impact it may have on its consolidated financial statements.

In July 2025, the FASB issued ASU 2025-05, “Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets”. ASU 2025-05 provides a practical expedient that all entities can use when estimating expected credit losses for current accounts receivable and current contract assets arising from transactions accounted for under ASC 606, “Revenue from Contracts with Customers”. Under this practical expedient, an entity is allowed to assume that the current conditions it has applied in determining credit loss allowances for current accounts receivable and current contract assets remain unchanged for the remaining life of those assets. ASU 2025-05 is effective for fiscal years beginning after December 15, 2025, and interim reporting periods in those years. Entities that elect the practical expedient and, if applicable, make the accounting policy election are required to apply the amendments prospectively. The Company is currently evaluating this ASU and the impact it may have on its consolidated financial statements.

NOTE 3 – REVENUE RECOGNITION

Disaggregation of revenue

Revenues are recognized when control of the promised goods or services is transferred to our customers, in an amount that best reflects the consideration we expect to receive in exchange for those goods or services.

The following table disaggregates revenue based on type:

	Revenue by Type
	Three Months Ended March 31
	Three Months Ended June 30
	SUNation				HEC
		2025		2024		2025		2024
Residential contracts	$	78,~~896~~016,~~122~~690	$	8,~~131~~484,~~708~~744	$	2,~~738~~727,~~800~~495	$	3,~~227~~665,~~879~~952
Commercial contracts		1,~~275~~261,~~888~~992		~~997~~492,~~193~~202		—139,319		—(13,143)
Service revenue		~~372~~542,~~544~~167		~~624~~754,~~069~~701		~~353~~376,~~284~~591		~~238~~164,~~348~~964
Software revenue		—		—		—		—
	$	9,820,849	$	9,731,647	$	3,243,405	$	3,817,773
Other		—		—		—		—
	$	9,544,554	$	9,752,970	$	3,092,084	$	3,466,227


	Revenue by Type
	Six Months Ended June 30
	SUNation				HEC
		2025		2024		2025		2024
Residential contracts	$	15,912,812	$	16,616,452	$	5,466,295	$	6,893,831
Commercial contracts		2,537,880		1,489,395		139,319		(13,143)
Service revenue		914,711		1,378,770		729,875		403,312
	$	19,365,403	$	19,484,617	$	6,335,489	$	7,284,000

The following table disaggregates revenue based on the timing of satisfaction of the performance obligations:

	Three Months Ended March 31
	Three Months Ended June 30
	SUNation				HEC
		2025		2024		2025		2024
Performance obligations satisfied at a point in time	$	8,~~268~~558,~~666~~857	$	89,~~755~~239,~~777~~445	$	3,~~092~~104,~~084~~086	$	3,~~466~~830,~~227~~916
Performance obligations satisfied over time		1,~~275~~261,~~888~~992		~~997~~492,~~193~~202		—139,319		—(13,143)
	$	9,~~544~~820,~~554~~849	$	9,~~752~~731,~~970~~647	$	3,~~092~~243,~~084~~405	$	3,~~466~~817,~~227~~773


	Six Months Ended June 30
	SUNation				HEC
		2025		2024		2025		2024
Performance obligations satisfied at a point in time	$	16,827,523	$	17,995,222	$	6,196,170	$	7,297,143
Performance obligations satisfied over time		2,537,880		1,489,395		139,319		(13,143)
	$	19,365,403	$	19,484,617	$	6,335,489	$	7,284,000

Contract Balances

Contract assets represent costs and earnings in excess of amounts billed and direct costs, including commissions, financing and permitting fees paid prior to recording revenue. Contract liabilities represent amounts billed to clients in excess of revenue recognized to date and billings in excess of costs and earnings. Contract assets were $~~692~~604,~~821~~077 ~~and~~, $560,648, and $57,241 at ~~March~~June 3130, 2025, ~~and~~ December 31, 2024, and January 1, 2024, respectively. Contract liabilities were $1,~~724~~955,~~571~~162, ~~and~~ $2,314,483, and $2,552,452 at ~~March~~June 3130, 2025, ~~and~~ December 31, 2024, and January 1, 2024, respectively. During the ~~three~~six months ended ~~March~~June 3130, 2025, $~~0 in contract assets and $~~1,~~681~~953,~~228~~276 within contract liabilities as of December 31, 2024 has been recognized within ~~cash and~~ revenue~~, respectively~~.

NOTE 4 – CONTRACTS IN PROGRESS

Billings in excess of costs and estimated earnings as of ~~March~~June 3130, 2025 and December 31, 2024 are as follows:

	March 31, 2025		December 31, 2024
	June 30, 2025		December 31, 2024
Billings to date	$	~~577~~647,~~002~~062	$	3,055,354
Costs incurred on uncompleted contracts		~~202~~121,~~295~~498		1,120,213
Estimated earnings		76104,~~534~~090		1,490,831
Cost plus estimated earnings		~~278~~225,~~829~~588		2,611,044
Billings in excess of costs plus estimated earnings on uncompleted contracts	$	~~298~~421,~~173~~474	$	444,310

~~Costs and estimated earnings in excess of billings as of March 31, 2025 and December 31, 2024 are as follows:~~20

	March 31, 2025		December 31, 2024
Costs incurred on uncompleted contracts	$	2,575,623	$	1,233,151
Estimated earnings		2,419,974		1,219,234
Total costs and estimated earnings		4,995,597		2,452,385
Billings to date		4,302,776		1,891,737
Costs and estimated earnings in excess of billings on uncompleted contracts	$	692,821	$	560,648

Costs and estimated earnings in excess of billings as of June 30, 2025 and December 31, 2024 are as follows:


	June 30, 2025		December 31, 2024

Costs incurred on uncompleted contracts	$	2,895,293	$	1,233,151
Estimated earnings		2,802,369		1,219,234
Total costs and estimated earnings		5,697,662		2,452,385
Billings to date		5,093,585		1,891,737
Costs and estimated earnings in excess of billings on uncompleted contracts	$	604,077	$	560,648

NOTE 5 –INTANGIBLE ASSETS

The Company’s identifiable intangible assets with finite lives are being amortized over their estimated useful lives and were as follows:

			March 31, 2025
			June 30, 2025
	Estimated Useful Life	Gross Carrying Amount		Accumulated Amortization			Impairment loss	Net
Tradenames & trademarks	8 years	$	17,900,000	$	(6,~~238~~797,~~542~~917)	$	—	$	11,~~661~~102,~~458~~083
Developed technology	4 years		2,400,000		(1,650,000)		(750,000)		—
		$	20,300,000	$	(78,~~888~~447,~~542~~917)	$	(750,000)	$	11,~~661~~102,~~458~~083



			December 31, 2024
	Estimated Useful Life	Gross Carrying Amount		Accumulated Amortization			Impairment loss	Net
Tradenames & trademarks	8 years	$	17,900,000	$	(5,679,167)	$	—	$	12,220,833
Developed technology	4 years		2,400,000		(1,650,000)		(750,000)		—
		$	20,300,000	$	(7,329,167)	$	(750,000)	$	12,220,833

Amortization expense on these identifiable intangible assets was $559,375 and $709,375 during the three months ended ~~March~~June 3130, 2025 and 2024, respectively and $1,118,750 and $1,418,750 for the six months ended June 30, 2025 and 2024, respectively. The estimated future amortization expense for identifiable intangible assets during the next fiscal years is as follows:

Quarter Ending and Year Ending December 31:
Q2 - Q4 2025	$	1,678,125
Q3 - Q4 2025	$	1,118,750
2026		2,237,500
2027		2,237,500
2028		2,237,500
2029		2,237,500
Thereafter		1,033,333
Total	$	11,~~661~~102,~~458~~083

NOTE 6 – COMMITMENTS AND CONTINGENCIES

Revolving Line of Credit

On April 14, 2025, the Company entered into a Secured Revolving Line of Credit Agreement (the “Revolving Credit Agreement”) with MBB Energy, LLC (“MBB”), an affiliate of the Company, as lender, providing for a $1.0 million

revolving credit facility (the “Revolver”). The Revolver matures on April 14, 2026, unless earlier terminated pursuant to its terms.

Borrowings, if any, under the Revolver will bear interest at a fixed annual rate of 8%, payable monthly in arrears on the first day of each calendar month. The Revolving Credit Agreement includes customary affirmative and negative covenants, as well as standard events of default, which, if triggered, may permit the lender to accelerate all outstanding obligations under the facility. The Company may repay outstanding borrowings at any time without penalty. As of June 30, 2025, no amounts have been drawn on the Revolver. As of June 30, 2025, the Company was in compliance with all covenants and other requirements of the Revolving Credit Agreement.

Loan Payable

Pineapple Energy LLC ~~had~~entered into a loan on December 11, 2020 in an original amount of $7,500,000 payable to Hercules Capital, Inc. (“Hercules”) under a loan and security agreement (the “Term Loan Agreement”). This loan accrued interest at 10%, payable-in-kind (“PIK”) and was initially due and payable on December 10, 2023. There were no financial covenants associated with this loan. This loan was used to acquire fixed assets, inventory, and intangible assets of Sungevity in an asset acquisition in December 2020. As the transaction did not involve the exchange of monetary consideration, the assets were valued at the Company’s most reliable indication of fair value, which was debt issued in consideration for the assets. Accordingly, Pineapple Energy assessed the fair market value of the debt instrument at $4,768,000 at the asset acquisition date (a non-recurring Level 3 fair value input). The Company initially accreted the value of the debt over its life at a discount rate of approximately 25%.

On December 16, 2021, the Term Loan Agreement was amended, whereby, among other things, the maturity date was extended to December 31, 2024, subject to various prepayment criteria. In addition, the amendment provided that $4,500,000 plus all accrued and unpaid interest and expenses were to be repaid upon Closing and receipt of the PIPE funds, with the remaining principal to be paid upon the loan maturity date. The amendment represented a modification to the loan agreement with the existing lender as both the original loan agreement and the amendment allow for immediate prepayment and the Company passed the cash flow test.

On May 31, 2023, the Term Loan Agreement was further amended (the “Second Amendment”), primarily for the purpose of obtaining consent for the senior financing from Decathlon Specialty Finance, LLC (the “Decathlon Financing”), the proceeds of which were partially applied to repay $1,500,000 of the principal amount of the term loan. At the time of the Second Amendment and prior to the repayment, the aggregate remaining balance of the term loan, including principal and interest, was $3,375,742. The Second Amendment also extended the maturity date of the term loan to June 2, 2027 and set the interest rate at ten percent (10.0%) payable monthly and removing the PIK interest. After giving effect to the Second Amendment, the aggregate remaining principal balance of $1,875,742 along with interest is payable in equal monthly installments of principal and interest beginning on July 3, 2023 and continuing on the first business day of each month thereafter. The Second Amendment represented a modification under ASC 470-50 as the original loan agreement and the amended agreement are not substantially different.

On July 22, 2024, the Term Loan Agreement was further amended (the “Third Amendment”), primarily for the purpose of obtaining consent for the bridge loan financing from Conduit Capital U.S. Holdings LLC and MBB Energy, LLC. The Third Amendment represented a modification under ASC 470-50 as the original loan agreement and the amended agreement were not substantially different. The Company also entered into a Joinder and Amendment to Subordination Agreement (the “Joinder Agreement”) with Decathlon, Hercules Capital, Inc., Conduit and MBB. Pursuant thereto, Conduit and MBB became parties to the Subordination Agreement dated June 21, 2023, among the Company, Decathlon, and Hercules Capital, Inc. In accordance with the Joinder Agreement, Conduit and MBB agreed to subordinate their respective security interests in the Company’s assets, to the first priority security interest of Decathlon and the second security priority interest of Hercules.

On September 20, 2024, the Term Loan Agreement was further amended (the “Fourth Amendment”), whereby Hercules waived the October 2024 amortization payment. The Company made payment of monthly interest on October 1, 2024 and resumed making monthly payment of principal on November 1, 2024 pursuant to the loan agreement. The Fourth Amendment represented a modification as both the original loan agreement and the amendment are not substantially different.

At December 31, 2024, the combined loan and accrued interest balance was $680,513. A new effective interest rate of approximately 48.6% was established during the second quarter of 2023 based on the carrying value of the revised cash flows. As of March 3, 2025, the combined loan and accrued interest balance, net of unamortized debt discount and debt issuance costs, was $682,955 and the aggregate remaining balance of the Term Loan, including principal and interest, was $1,230,555; however, the parties to the Term Loan Agreement agreed to a reduced aggregate repayment amount of $1,138,263, if voluntarily repaid early in full. On March 3, 2025, the Company repaid the remaining balance of this loan in full using a portion of the proceeds from the first tranche of the securities offering which occurred on February 27, 2025 (see Note 9, Equity, for further details). As a result of this complete repayment, the Term Loan Agreement has been terminated (together with other agreements and instruments related thereto), and no further monthly or other payments or remuneration of any kind shall be paid or be payable following the termination of this Term Loan Agreement, and no early termination penalties or prepayment premium were incurred by the Company in connection with the termination of this Loan Agreement. The Company recorded a loss on extinguishment of debt of $455,308 in connection with the repayment of the loan, which represents the difference between (a) the reduced aggregate repayment amount and (b) the carrying amount of the loan at the repayment date, which included the outstanding principal and interest balance, less unamortized debt discount and debt issuance costs.

Interest and accretion expense was $0 and $192,290 for three months ended June 30, 2025 and 2024, respectively, and $100,450 and $~~202~~395,~~829~~119 for ~~three~~the six months ended ~~March~~June 3130, 2025 and 2024, respectively. The loan was collateralized by all of Pineapple Energy LLC’s personal property and assets.

Decathlon Fixed Loan

On June 1, 2023, the Company entered into a Revenue Loan and Security Agreement (the “Loan Agreement”) with Decathlon Specialty Finance, LLC (“Decathlon”). The Loan Agreement provided for a loan facility for the Company in the maximum amount of $7.5 million with a maturity date of June 1, 2027 (the “Decathlon Fixed Loan”), with the full amount being advanced to the Company upon execution of the Loan Agreement. The Decathlon Fixed Loan contained customary conditions, representations and warranties, affirmative and negative covenants, mandatory prepayment provisions and events of default. The advances were secured by all present and hereafter acquired property of the Company.

At issuance of the Loan Agreement, the Company concluded that the potential acceleration of amounts outstanding under the Loan Agreement upon an event of default included a substantial premium and met the requirement to be bifurcated and recorded as a derivative liability at fair value at inception and at the end of each quarterly reporting period. As of December 31, 2024, the fair value of this embedded derivative liability was estimated to be $24,800 and was recorded within current liabilities.

The Decathlon Fixed Loan was repayable in fixed monthly payments, which generally aggregate to $960,000 that was paid in 2023, $2,220,000 that was paid in 2024, $2,580,000 payable in 2025, $2,760,000 payable in 2026 and $3,480,000 payable in 2027 to the maturity date. All outstanding advances and interest under the Loan Agreement were scheduled to be due at maturity on June 1, 2027 (unless accelerated upon a change of control or the occurrence of other events of default). Interest accrued on the amounts advanced pursuant to the Loan Agreement at such rate as is necessary to generate an amount equal to the Minimum Interest, which was defined in the Loan Agreement as the following multiple of the advanced amount depending on the period during which all amounts due under the Loan Agreement were paid: (i) 0.25 times if on or before 12 months after the Effective Date (as defined in the Loan Agreement); (ii) 0.35 times if after 12 months and on or before 24 months after the Effective Date; (iii) 0.50 times if after 24 months and on or before 36 months after the Effective Date; and 0.60 times if after 36 months after the Effective Date. The Company could at its option prepay the advance(s) and accrued but unpaid interest from time to time without penalty or premium (other than payment of the Minimum Interest (as defined in the Loan Agreement)).

19The Company incurred an aggregate of $348,065 in debt issuance costs that were recorded as a discount and were amortized using the effective interest method over the life of the Decathlon Fixed Loan using an effective interest rate of 21%. At December 31, 2024, the combined loan and accrued interest balance was $6,586,325, and the unamortized debt issuance costs balance was $173,193. As of March 3, 2025, the combined loan and accrued interest balance, net of unamortized debt issuance costs, was $6,435,999 and the aggregate balance, together with accrued principal and interest, remaining under the Loan Agreement was $6,740,516; however, the parties to the Loan Agreement agreed to a reduced

generate an amount equal to the Minimum Interest, which was defined in the Loan Agreement as the following multiple of the advanced amount depending on the period during which all amounts due under the Loan Agreement were paid: (i) 0.25 times if on or before 12 months after the Effective Date (as defined in the Loan Agreement); (ii) 0.35 times if after 12 months and on or before 24 months after the Effective Date; (iii) 0.50 times if after 24 months and on or before 36 months after the Effective Date; and 0.60 times if after 36 months after the Effective Date. The Company could at its option prepay the advance(s) and accrued but unpaid interest from time to time without penalty or premium (other than payment of the Minimum Interest (as defined in the Loan Agreement)).23

~~The Company incurred an~~ aggregate of $348,065 in debt issuance costs that were recorded as a discount and were amortized using the effective interest method over the life of the Decathlon Fixed Loan using an effective interest rate of 21%. At December 31, 2024, the combined loan and accrued interest balance was $6,586,325, and the unamortized debt issuance costs balance was $173,193. As of March 3, 2025, the combined loan and accrued interest balance, net of unamortized debt issuance costs, was $6,435,999 and the aggregate balance, together with accrued principal and interest, remaining under the Loan Agreement was $6,740,516; however, the parties to the Loan Agreement agreed to a reduced aggregate repayment amount of $6,229,875 if voluntarily repaid early in full. On March 3, 2025, the Company repaid the remaining balance of this loan in full using a portion of the proceeds from the first tranche of the securities offering which occurred on February 27, 2025 (see Note 9, Equity, for further details). As a result of this complete repayment, the Decathlon Loan Agreement has been terminated (together with other agreements and instruments related thereto), and no further monthly or other payments or remuneration of any kind shall be paid or be payable following the termination of this Loan Agreement, and no early termination penalties or prepayment premium were incurred by the Company in connection with the termination of this Loan Agreement. The Company recorded a gain on extinguishment of debt of $230,924 in connection with the repayment of the loan, which represents the difference between (a) the reduced aggregate repayment amount and (b) the carrying amount of the loan at the repayment date, which included the outstanding principal and interest balance, plus the fair value of the embedded derivative liability, and less unamortized debt issuance costs.

The Company recorded interest expense of $0 and $379,721 for the three months ended June 30, 2025 and 2024, respectively, and $232,866 and $~~389~~769,~~457~~178 for the ~~three~~six months ended ~~March~~June 3130, 2025 and 2024, respectively.

SUNation Long-Term Note and Earnout

In connection with the SUNation acquisition, on November 9, 2022, the Company issued a $5,486,000 Long-Term Promissory Note (the “Long-Term Note”). The Long-Term Note was unsecured and matured on November 9, 2025. It carried an annual interest rate of 4% until the first anniversary of issuance, then 8% thereafter until the Long-Term Note was paid in full. Interest was due annually on each December 31^st. The Company was unable to make the second and third interest payments totaling $250,703 and $460,194 due on December 31, 2023 and 2024, respectively. The Company was required to make a principal payment of $2,740,000 on November 9, 2024. The Company was not permitted to make any payments under the Long-Term Note unless Decathlon had provided prior written consent to such payment pursuant to the Loan Agreement. Pursuant to that certain subordination letter dated May 31, 2023, each holder of the Long-Term Note had subordinated all payments under the Long-Term Note to the obligations owed to Decathlon under the Loan Agreement (the “Decathlon Obligations”) and had agreed that, until the Decathlon Obligations have been paid in full, any payment under the Long-Term Note was subject to Decathlon’s prior written consent. As the debt was part of the SUNation purchase price allocation, the Company assessed the fair market value of the debt instrument at $4,830,533 at the asset acquisition date (a non-recurring Level 3 fair value input). The Company accretes the value of the debt over its life at a discount rate of approximately 11.2%. The Long-Term Note may be prepaid at the Company’s option at any time without penalty.

On March 13, 2025, the Company paid the previously unpaid interest totaling $710,897, after the Decathlon debt was paid in full. As noted above, the Company paid the Decathlon debt in full on March 3, 2025 and no longer had to receive written consent to make these payments. On April 10, 2025, the Long-Term Note was amended and restated whereby the principal amount of $5,486,000 previously due and payable under the original Long-Term Note, together with all accrued and unpaid interest owing thereunder, shall be due and payable on May 1, 2028, and such amended note shall become a senior secured instrument. Principal and interest payments under the amended Long-Term Note shall be payable monthly on the first day of each month commencing on June 1, 2025 for thirty-six consecutive months thereafter.

20On April 10, 2025 the Long-Term Note was amended and restated as follows: The principal amount of $5,486,000 previously due and payable under the original Long-Term Note, together with all accrued and unpaid interest owing thereunder, shall be due and payable on May 1, 2028 (the “Maturity Date”), and such amended note (“Amended Long-Term Note”) is now a senior secured instrument. The total balance of the Amended Long-Term Note on April 10, 2025 was $5,605,436 and interest accrues at 8% per annum. Principal and interest payments under the Amended Long-Term Note shall be payable monthly on the first day of each month commencing with June 1, 2025 for thirty-six (36) consecutive months thereafter pursuant to the terms thereunder. The Amended Long-Term Note represented a modification under ASC 470-50 as the original loan agreement and amended loan agreement are not substantially different. The Company applied modification accounting to the amendment of the Long-Term Note and recorded $38,613 of debt issuance costs as part of the discount on the Amended Long-Term Note.

The ~~balance~~Amended of Long-Term Note ~~recorded~~includes atoptional ~~March~~and 31mandatory prepayment provisions, ~~2025~~including ~~and~~required ~~December~~partial ~~31,~~or ~~2024~~full ~~was~~repayment ~~$5,518,934~~in ~~and~~connection ~~$6,076,978,~~with ~~respectively.~~specified ~~Interest~~capital ~~and~~raises. ~~accretion~~The ~~expense~~Amended ~~related~~Long-Term toNote ~~the~~is ~~notes~~a ~~totaled~~senior ~~$152,852~~secured ~~and~~instrument ~~$152,855~~pursuant ~~for~~to ~~the~~a ~~three~~pledge ~~months~~agreement ~~ended~~and ~~March~~includes ~~31,~~customary ~~2025~~default provisions and ~~2024~~acceleration ~~respectively~~clauses.

On April 10, 2025, the Company agreed to amend the terms of the unearned 2024 earnout by entering into the Senior Secured Contingent Note Instrument (“Contingent Note”). Pursuant to the terms of the Contingent Note, the unearned 2024 earnout was rescheduled and shall be based on the earnout terms set forth therein pursuant to the financial conditions and terms covering each of fiscal years 2024 and 2025 and, if attained, shall be payable in fiscal year 2026, which payment is

further conditioned on the continued employment of the holders at the time of such earnout payment trigger date. The maximum amount due under the earnout liability is $2,500,000 payable to the holders in the form of the Contingent Note, issuable on the earnout payment trigger date. Interest accrues on the Contingent Note commencing the month after issuance at a rate of 8% per annum, payable in arears, and repayments of principal are due in 24 equal monthly installments commencing the month after issuance.

The earnout liability is accounted for under ASC 710 as a deferred compensation arrangement and is accreted to $2,303,182 over the requisite service period as it is probable the financial conditions will be attained. The earnout liability represents the present value of the expected future cash flows as of the eligibility date of May 5, 2026. The balance of the earnout liability at June 30, 2025 was $512,821. Compensation expense related to the earnout liability for the three and six months ended June 30, 2025 totaled $512,821 and is recorded in “Selling, general and administrative expenses.”

As noted in Note 12, Fair Value Measurements, the Company had a remaining earnout consideration accrual balance of $2,500,000 at December 31, 2024 related to the SUNation acquisition earned 2023 earnout. During the six months ended June 30, 2025, the Company paid the balance to satisfy the outstanding liability of the earned 2023 earnout in full.

Conduit Capital Bridge Loan

On July 22, 2024, the Company obtained bridge loan financing for working capital purposes from Conduit Capital U.S. Holdings LLC (“Conduit”), an unaffiliated lender (the “Original Conduit Note”). On such date, Conduit loaned the principal sum of $500,000 to the Company on an original issue (“OID”) basis of 20% and accordingly, Conduit advanced $400,000 to the Company (the “Initial Conduit Loan”). The loans due to Conduit accrued interest on the unpaid principal amount, without deduction for the OID, at an annual rate of 20%; provided that payment in full on the Conduit Maturity Date (as defined below) would satisfy the interest accrual on the loans from initial issuance to the Conduit Maturity Date. The Company may request that Conduit provide additional advances for working capital on identical terms, conditions and interest rate as the Initial Conduit Loan on an OID basis, up to an aggregate principal sum of $500,000, and Conduit had the right, without commitment or obligation, to make such requested loan(s) by advancing 80% percent of the principal thereof. All such loans were secured by a pledge of all of the Company’s assets. As a condition to such loan(s), the Company agreed to cause the nomination of a designee of Conduit for election to its Board of Directors.

The loans due to Conduit were scheduled to become due on July 21, 2025 (the “Conduit Maturity Date”). In accordance with the terms of the loan agreements with Conduit, if the Company consummated one or more equity offerings prior to the Conduit Maturity Date in which it derived aggregate gross proceeds of at least $3.15 million, it would be required to repay the unpaid principal balance of the Initial Conduit Loan, including the OID, simultaneous with the closing(s) of such offering(s). Further, if the Company consummated one or more equity offerings prior to the Conduit Maturity Date in which it derived aggregate gross proceeds of at least $4.4 million, the Company would be required to repay the entire unpaid principal amount of all loans due to Conduit, including the OID, simultaneous with the closing(s) of such offering(s).

At issuance of the Original Conduit Note, the Company concluded that the potential acceleration of amounts outstanding under the loan agreements with Conduit upon an event of default or if the Company consummated one or more equity offerings meeting certain criteria (as noted above) included a substantial premium and met the requirement to be bifurcated and recorded as a derivative liability at fair value at inception and revalued at the end of each quarterly reporting period. The Company determined the initial fair value of this embedded derivative liability to be $8,080 and recorded a corresponding debt discount. As of December 31, 2024, the fair value of this embedded derivative liability was estimated to be $28,360 and was recorded within current liabilities.

The Company incurred $18,150 in debt issuance costs in connection with the Initial Conduit Loan that were recorded as a discount and initially amortized using the effective interest method over the life of the Initial Conduit Loan along with the OID of $100,000 and initial fair value of the embedded derivative liability using an effective interest rate of approximately 29.1%.

On September 9, 2024, the Company and Conduit entered into an Amended and Restated Convertible Secured Note (the “First Amended Conduit Note”) which amended the Original Conduit Note, which provided for an additional principal advance of $120,000 (the “Second Conduit Advance”). The First Amended Conduit Note also provided that Conduit may convert all or any portion of the Second Conduit Advance and all accrued but unpaid interest thereon into a number of shares (the “Conduit Note Conversion Shares”) of the Company’s common stock calculated as the total dollar amount to be converted divided by $4,500.00 ($0.45 prior to the Reverse Stock Splits) (the “Conversion Price”). The Company analyzed the changes made in the First Amended Conduit Note under ASC 470-50 to determine if extinguishment accounting was applicable. Under ASC 470-50-40-10, a modification or an exchange that adds or eliminates a substantive conversion option as of the conversion date is always considered substantial and requires extinguishment accounting. Since the First Amended Conduit Note added a substantive conversion option, extinguishment accounting was applicable. In accordance with the extinguishment accounting guidance, the Company recorded a loss on extinguishment of $35,657, which represented the difference between (a) the fair value of the modified loans due to Conduit less the net cash proceeds received from the Second Conduit Advance and (b) the carrying amount of the loans due to Conduit immediately prior to the Second Conduit Advance.

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analyzed the changes made in the First Amended Conduit Note under ASC 470-50 to determine if extinguishment accounting was applicable. Under ASC 470-50-40-10, a modification or an exchange that adds or eliminates a substantive conversion option as of the conversion date is always considered substantial and requires extinguishment accounting. Since the First Amended Conduit Note added a substantive conversion option, extinguishment accounting was applicable. In accordance with the extinguishment accounting guidance, the Company recorded a loss on extinguishment of $35,657, which represented the difference between (a) the fair value of the modified loans due to Conduit less the net cash proceeds received from the Second Conduit Advance and (b) the carrying amount of the loans due to Conduit immediately prior to the Second Conduit Advance.

On September 23, 2024, the Company and Conduit entered into a further amended and restated convertible secured credit note (the “Second Amended Conduit Note”), which amended and restated the First Amended Conduit Note. Under the terms of the Second Amended Conduit Note, Conduit loaned an additional principal sum of $380,000 to the Company (the “Third Conduit Advance”) on an OID basis of 20%. Additionally, pursuant to the Second Amended Conduit Note, Conduit was granted a demand registration right, which is in addition to the piggyback registration rights set forth in the First Amended Conduit Note, which registration rights are inclusive of all convertible shares issuable for the Second Conduit Advance and Third Conduit Advance, if converted; however, all out of pocket costs and expenses incurred in connection with this demand registration right would be borne by Conduit. The Third Conduit Advance, together with all accrued but unpaid interest thereon, was convertible into shares of common stock at the Conversion Price. The Second Amended Conduit Note represented a modification under ASC 470-50 as the First Amended Conduit Note and the Second Amended Conduit Note were not substantially different. A new effective interest rate of approximately 22.9% was established following the Third Conduit Advance based on the carrying value of the revised cash flows.

Notwithstanding anything to the contrary as set forth in the Conduit Note or any tranche or amendment related thereto, in no event could the Original Issue Discount, together with interest payable under the Conduit Note or such other documents related thereto, exceed an aggregate of twenty percent on the then outstanding principal sum, except in the event of a default, which shall include an additional 5% on the then outstanding principal sum.

At December 31, 2024, the loan balance was $1,000,000, and the unamortized debt issuance costs balance was $119,389.

As of February 28, 2025, the loan balance, net of unamortized debt issuance costs, was $913,924, and the aggregate loan balance was $1,000,000. On February 28, 2025, the Company paid the $1,000,000 total loan balance to Conduit as the Company had gross proceeds from equity offerings in excess of $4.4 million (see Note 9, Equity, for further details). As a result of this complete repayment, the Conduit note has been terminated and no further principal, interest or accrual thereunder remain following the repayment and related termination of the Conduit loan agreement(s). The Company recorded a loss on extinguishment of debt of $57,716 in connection with the repayment of the loan, which represents the difference between (a) the aggregate repayment amount and (b) the carrying amount of the loan at the repayment date, which included the outstanding principal balance, plus the fair value of the embedded derivative liability, and less unamortized debt issuance costs.

The Company ~~recorded~~did not record interest expense during the three months ended June 30, 2025 and ~~accretion~~2024, respectively and recorded expense of $33,312 and $0 ~~for~~during the ~~three~~six months ended ~~March~~June 3130, 2025 and 2024, respectively.

MBB Energy Bridge Loan

On July 22, 2024, the Company obtained bridge loan financing for working capital purposes from MBB ~~Energy~~, ~~LLC (“MBB”),~~ an affiliate of the Company (the “Original MBB Note”). On such date, MBB loaned the principal sum of $500,000 to the Company on an OID basis of 20% and accordingly, MBB advanced the sum of $400,000 to the Company (the “Initial MBB Loan”). The loans due to MBB accrued interest on the unpaid principal amount, without deduction for the OID, at an annual rate of 20%; provided that payment in full on the MBB Maturity Date (as defined below) satisfied the interest accrual on the loans from initial issuance to the Conduit Maturity Date. The Company could request that MBB provide additional advances for working capital on identical terms, conditions and interest rate as the Initial MBB Loan on an OID basis, up to an aggregate principal sum of $500,000, and MBB had the right, without commitment or obligation, to make such requested loan(s) by advancing 80% percent of the principal thereof. All such loans were secured by a pledge of all of the Company’s assets. MBB has granted Conduit the exclusive right to enforce MBB’s loans on MBB’s behalf.

The loans due to MBB were scheduled to become due on July 21, 2025 (the “MBB Maturity Date”). In accordance with the terms of the loan agreements with MBB, if the Company consummated one or more equity offerings prior to the MBB Maturity Date in which it derived aggregate gross proceeds of at least $3.15 million, it was required to repay the unpaid principal balance of the Initial MBB Loan, including the OID, simultaneous with the closing(s) of such offering(s). Further, if the Company consummated one or more equity offerings prior to the MBB Maturity Date in which the Company derived aggregate gross proceeds of at least $4.4 million, the Company was required to repay the entire unpaid principal amount of all loans due to MBB, including the OID, simultaneous with the closing(s) of such offering(s).

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Further, if the Company consummated one or more equity offerings prior to the MBB Maturity Date in which the Company derived aggregate gross proceeds of at least $4.4 million, the Company was required to repay the entire unpaid principal amount of all loans due to MBB, including the OID, simultaneous with the closing(s) of such offering(s).

At issuance of the Original MBB Note, the Company concluded that the potential acceleration of amounts outstanding under the loan agreements with MBB upon an event of default or if the Company consummated one or more equity offerings meeting certain criteria (as noted above) included a substantial premium and met the requirement to be bifurcated and recorded as a derivative liability at fair value at inception and at the end of each quarterly reporting period. The Company determined the initial fair value of this embedded derivative liability to be $8,080 and recorded a corresponding debt discount. As of December 31, 2024, the fair value of this embedded derivative liability was estimated to be $29,121 and was recorded within current liabilities.

The OID of $100,000 was recorded as a discount and initially amortized using the effective interest method over the life of the Initial MBB Loan along with the initial fair value of the embedded derivative liability using an effective interest rate of approximately 24.3%.

On August 16, 2024, MBB provided an additional principal advance of $500,000 (the “Second MBB Advance”). The Second MBB Advance represented a modification under ASC 470-50. A new effective interest rate of approximately 24.1% was established following the Second MBB Advance based on the carrying value of the revised cash flows.

Notwithstanding anything to the contrary as set forth in the MBB Note or any tranche or amendment related thereto, in no event could the OID, together with interest payable under the MBB Note or such other documents related thereto, exceed an aggregate of twenty percent on the then outstanding principal sum, except in the event of a default, which shall include an additional 5% on the then outstanding principal sum.

At December 31, 2024, the loan balance was $1,000,000, and the unamortized debt issuance costs balance was $125,391. As of February 28, 2025, the loan balance, net of unamortized debt issuance costs, was $909,509, and the aggregate loan balance was $1,000,000. On February 28, 2025, the Company repaid the $1,000,000 total loan balance to MBB as the Company had gross proceeds from equity offerings in excess of $4.4 million (see Note 9, Equity, for further details). As a result of this complete repayment, the MBB note has been terminated and no further principal, interest or accrual thereunder remain following the repayment and related termination of the MBB loan agreement(s). The Company recorded a loss on extinguishment of debt of $61,370 in connection with the repayment of the loan, which represents the difference between (a) the aggregate repayment amount and (b) the carrying amount of the loan at the repayment date, which included the outstanding principal balance, plus the fair value of the embedded derivative liability, and less unamortized debt issuance costs.

The Company ~~recorded~~did not record interest expense during the three months ended June 30, 2025 and ~~accretion~~2024, respectively and recorded expense of $34,900 and $0 ~~for~~during the ~~three~~six months ended ~~March~~June 3130, 2025 and 2024, respectively.

Equipment Loans

The Company obtains various equipment loan agreements through SUNation. These loans are secured by machinery and equipment and expire at various dates through August 2029 with interest rates ranging from 4.5 to 9.7% per annum. The balance for the equipment loans recorded at ~~March~~June 3130, 2025 and December 31, 2024 was $~~220~~203,~~656~~855 and $238,266, respectively. Interest expense was $4,~~577~~332 and $82,~~968~~592 for the three months ended ~~March~~June 3130, 2025 and 2024, respectively and $8,909 and $11,560 for the six months ended June 30, 2025 and 2024, respectively.

Promissory Note

Through the SUNation acquisition, the Company acquired a promissory note with a former shareholder and member of SUNation through a buyout agreement. The promissory note includes monthly payments of principal and interest at an annual rate of 3.25%. The promissory note matures on March 1, 2031. The balance for the promissory note recorded at ~~March~~June 3130, 2025 and December 31, 2024 was $1,~~346~~282,~~274~~722 and $1,409,313, respectively. Interest expense was $1110,~~280~~767 and $1312,~~293~~796 for the three months ended ~~March~~June 3130, 2025 and 2024, respectively, and $22,047 and $26,090 for the six months ended June 30, 2025 and 2024, respectively.

Other Contingencies

In the ordinary course of business, the Company is exposed to legal actions and claims and incurs costs to defend against these actions and claims. Company management is not aware of any outstanding or pending legal actions or claims that could materially affect the Company’s financial position or results of operations.

23At December 31, 2024, the Company accrued $1,300,000 for loss contingencies related to certain prior securities issuances. During the first six months of 2025, the Company settled this obligation by issuing 6,068 shares (1,213,656 shares prior to the April Reverse Stock Split) of common stock and payment of $740,458 in cash. There was no remaining accrual balance at June 30, 2025.

At December 31, 2024, the Company accrued $1,300,000 for loss contingencies related to certain prior securities issuances. During the first quarter of 2025, the Company settled this obligation by issuing 6,068 shares (1,213,656 shares prior to the April Reverse Stock Split) of common stock and payment of $56,313 in cash. At March 31, 2025 the remaining accrual of $342,216 and is recorded within accrued loss contingencies in the Condensed Consolidated Balance Sheets. The remaining accrual balance was paid in April 2025.

NOTE 7 – RELATED PARTY TRANSACTIONS

Related party receivables

The Company has provided advances to employees resulting in a balance as of ~~March~~June 3130, 2025 and December 31, 2024 of $23,~~739~~039 and $23,471, respectively.

Leases

The Company leases its offices in Hawaii from a company owned by the prior owner of HEC, of whom is still an employee. The Company leased its New York office from a company owned by the prior owners of SUNation, one of whom is an officer and another the Interim Chief Executive Officer and director of the Company, until September 12, 2024, when the building and related lease was sold to a third-party.

Debt

As of ~~March~~June 3130, 2025, the Company only has outstanding related party debt under the SUNation Long-Term Note and the Revolving Credit Agreement. The MBB Note was paid in full during the first quarter of 2025. See further information regarding ~~this~~the related part debt within Note 6, Commitments and Contingencies.

NOTE 8 – SHARE-BASED COMPENSATION

2022 Equity Incentive Plan

On January 24, 2022 the CSI board of directors adopted, and on March 16, 2022 the Company’s shareholders approved, the Company’s 2022 Equity Incentive Plan (“2022 Plan”), which became effective on March 28, 2022. The 2022 Plan authorizes incentive awards to officers, key employees, non-employee directors, and consultants in the form of options (incentive and non-qualified), stock appreciation rights, restricted stock awards, stock unit awards, and other stock-based awards. Following amendments approved on December 7, 2022 and July 19, 2024, the 2022 Plan authorizes the issuance of up to 67 shares of common stock (10,000,000 prior to the Reverse Stock Splits). At ~~March~~June 3130, 2025, 4 shares had been issued under the 2022 Plan, 3 shares were subject to currently outstanding unvested restricted stock units (“RSUs”), and 60 shares were available for grant under future awards.

Inducement Grants

On October 10, 2022, the board of directors approved an inducement grant of 1 RSU (54,852 prior to the Reverse Stock Splits) in connection with the hiring of a new Chief Financial Officer. On November 6, 2022, the board of directors approved inducement grants totaling 1 RSU (89,698 prior to the Reverse Stock Splits) in connection with the hiring of Senior Vice Presidents in connection with the SUNation acquisition.

Changes in Restricted Stock Units Outstanding

The following table summarizes the changes in the number of RSUs during the ~~three~~six months ended ~~March~~June 3130, 2025:

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	RSUs	Weighted Average Grant Date Fair Value Per Share
Outstanding – December 31, 2024	9	$	246,833.33
Units Granted	—		—
Shares Issued	(4)		150,221.25
Forfeited	—		—
Outstanding – March 31, 2025	5		288,900.00
Outstanding – June 30, 2025	5		288,900.00

All RSUs and weighted average grant date fair value per share values have been adjusted to reflect the impact of the Reverse Stock Splits of the common stock at ratios of 1-for-200 that became effective on April 21, 2025, 1-for-50 that became effective on October 17, 2024 and 1-for-15 that became effective on June 12, 2024. See Note 1, "Nature of Operations," for further details.

Compensation Expense

Share-based compensation expense recognized for the three months ended ~~March~~June 3130, 2025 and 2024 was $3022,~~815~~461 and $~~197~~(11,~~306~~583), respectively and $53,276 and $185,723 for the six months ended June 30, 2025 and 2024, respectively. Unrecognized compensation expense related to outstanding RSUs was $6543,~~878~~417 at ~~March~~June 3130, 2025 and is expected to be recognized over a weighted-average period of 1.0.8 years. Share-based compensation expense is recorded as a part of selling, general and administrative expenses.

Employee Stock Purchase Plan

On December 7, 2022, the Company’s shareholders approved an Employee Stock Purchase Plan (“ESPP”), pursuant to which eligible employees are able to acquire shares of common stock at a purchase price determined by the board of directors or compensation committee prior to the start of each six-month plan phase, which price may not be less than 85% of the fair market value of the lower of the value on the first day or the last day of the phase, or the value on the last day of the phase. The ESPP is considered compensatory under current Internal Revenue Service rules. At ~~March~~June 3130, 2025, 2 shares remained available for purchase under the ESPP.

NOTE 9 – EQUITY

Series A Preferred Stock

In June 2021, the Company entered into a stock purchase agreement to issue Series A Preferred Stock. At such time, the Series A Preferred Stock contained certain anti-dilution provisions. In November 2022, the Company amended and restated the agreement under which Series A Preferred shareholders agreed to waive such provisions in exchange for certain concessions from the Company. The Company’s outstanding Series A Preferred Stock contained anti-dilution provisions that would increase the number of shares issuable upon conversion, and lower the conversion price of the Series A Preferred Stock if the Company issues equity securities at a price less than the current conversion price of the Series A Preferred Stock at the time of such issuance. In February 2024, the Company entered into a Limited Waiver and Amendment (“Waiver”) and the investors agreed to a floor of $21,000.00 ($0.14 prior to the Reverse Stock Splits) with respect to the adjustment set forth for the conversion price and to waive future anti-dilution protection with respect to 50% of the shares of Preferred Stock held by such purchasers as of the date of the Waiver.

The Company is required to analyze amendments to preferred stock terms to determine the appropriate method of accounting to be applied. The Company determined that the Waiver resulted in an extinguishment of the Series A Preferred Stock. As a result, the Series A Preferred Stock was revalued immediately after the Waiver in February 2024. The difference between the previous carrying amount and the fair value of $751,125 was recognized as a deemed dividend in the three months ended March 31, 2024 that reduced additional paid-in-capital (“APIC”) and income available to common shareholders in calculating earnings per share.

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In addition, management evaluated the Series A Preferred Stock after the modifications and determined that they should be reclassified to mezzanine equity under ASC 480-10-S99 as a result of the Company not having sufficient authorized and unissued shares to settle a conversion to Common Stock.

Warrants

In September 2021, the Company entered into transactions with holders of its outstanding Series A Preferred Stock to issue PIPE Warrants to purchase the Company's common stock. At such time, the PIPE Warrants contained certain anti-dilution provisions. In November 2022, the Company amended and restated the agreement under which PIPE Warrant holders agreed to waive such provisions in exchange for certain concessions from the Company. The Company’s outstanding Series A Warrants have anti-dilution provisions that would increase the number of shares issuable upon exercise and lower the exercise price of the Series A Warrants if the Company issues equity securities at a price less than the current exercise price of the Series A Warrants at the time of such issuance. Pursuant to the Waiver, investors agreed to a floor of $21,000.00 ($0.14 prior to the Reverse Stock Splits) with respect to the anti-dilution adjustments in the warrants and extend the term of the warrants until March 28, 2029.

The PIPE Warrants were valued immediately before and immediately after the modifications to calculate the $10.6 million incremental value of the modified PIPE Warrants. The Company considered this incremental value to be a deemed dividend that reduced income available to common shareholders in calculating earnings per share.

Management evaluated the warrants after the modifications made in February 2024 and determined that they should be reclassified from equity to liability based on the guidance in ASC 815-40 and the Company failing to have enough authorized and unissued shares available to settle an exercise of the contract. In accordance with ASC 815-40, the carrying value of the warrants were adjusted to fair value through an adjustment in stockholders’ equity immediately prior to the reclassification. Subsequent to the reclassification, management remeasured the warrant liability to fair value and recorded the change in fair value to other income (expense) in the condensed consolidated statement of operations.

On September 9, 2024, the Company entered into a Securities Exchange Agreement with the holders of the Series A Preferred Stock and warrants to cancel and retire the Series A Preferred Stock and warrants in exchange for shares of Series C Convertible Preferred Stock of the Company (the “Series C Preferred Stock”).

Series C Preferred Stock

On September 9, 2024, the Company’s board of directors authorized the issuance of up to 35,000 shares of Series C Preferred Stock. As a result of the exchanged noted above, the Company issued 28,041 shares of Series C Preferred Stock. Each share of Series C Preferred Stock is convertible, at any time after issuance and at the option of the holder subject to certain beneficial ownership limitations, into a number of shares of common stock determined by dividing the Stated Value of such share by the Conversion Price. The Stated Value per share of Series C Preferred Stock is $1,000.00 and the Conversion Price per share of Series C Preferred Stock is $4,500.00 ($22.50 prior to the April Reverse Stock Split). The Series C Preferred Stock does not contain any of the price resets set forth in the Series A Preferred Stock, except in the case of stock splits, recapitalizations and similar transactions by the Company. During 2024, all 28,041 shares of Series C Preferred Stock were converted into 6,229 shares of common stock (1,246,262 prior to the April Reverse Stock Split). As of ~~March~~June 3130, 2025 and December 31, 2024, there were no shares of Series C Preferred Stock outstanding.

Registered Direct Offering

On February 5, 2024, the Company entered into a securities purchase agreement with certain institutional investors for the sale by the Company of 18 shares (2,702,703 prior to the Reverse Stock Splits) of the Company’s common stock in a registered direct offering. The purchasers in this offering purchased, and the Company sold, the shares at a purchase price per share of $55,500.00 ($0.37 prior to the Reverse Stock Splits). The sale closed on February 7, 2024 for aggregate gross proceeds of $1.0 million, before deducting the placement agent fees and related offering expenses.

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At the Market Offering

On October 21, 2024, the Company entered into an At the Market (“ATM”) Offering Agreement (the “Sales Agreement”) with Roth Capital Partners, LLC (the “Sales Agent”). The Company has authorized the sale, at its discretion, of common stock shares in an aggregate offering amount up to $10,000,000 under the Sales Agreement pursuant to the Company’s effective Registration Statement on Form S-3 (File No. 333-267066), as supplemented by a prospectus supplement. During the three months ended March 31, 2025, the Company sold an aggregate of 762 shares (152,250 shares prior to the April Reverse Stock Split) of common stock, respectively, for gross proceeds of $362,269 under the ATM facility, before deducting the related offering expenses. During the three months ended June 30, 2025, no shares were offered or sold under this ATM facility.

Series D Preferred Stock

On February 26, 2025, the Company entered into a consent and waiver agreement to the loan agreement with Conduit. In accordance therewith, the Company issued one share of Series D Preferred Stock to Conduit as further collateral security for the Conduit Loan. The Series D Preferred Stock was issued in accordance with a Certificate of Designation of Preferences, Rights, and Limitations filed with the State of Delaware on February 27, 2025. In connection with the issuance of the share of Series D Preferred Stock, Conduit granted an irrevocable proxy to the Company to vote such share on an as-converted basis as a single class with the holders of the Company’s common stock. ~~Such~~Upon ~~share was held in escrow by legal counsel to the Company, and upon~~ full payment of the Conduit Loan and following the April 2025 special meeting of shareholders, the Series D Preferred Stock share was returned to the Company and ~~will~~was be cancelled.

February 2025 Offering

On February 27, 2025, the Company entered into a securities purchase agreement (the “Purchase Agreement”) with certain institutional investors in which Roth Capital Partners LLC (“Roth”) acted as the placement agent pursuant to the terms of a Placement Agent Agreement (“PAA”) of same date, for the purchase and sale of an aggregate of $15 million in securities in a first closing consisting of (i) 9,825 shares (1,965,000 shares prior to the April Reverse Stock Split) of common stock, and (ii) pre-funded warrants to purchase up to 55,392 shares (11,078,480 shares prior to the April Reverse Stock Split) of common stock (the “Pre-Funded Warrants), and, subject to shareholder approval, an aggregate of $5 million in securities in a second closing consisting of (x) 21,739 shares (4,347,826 shares prior to the April Reverse Stock Split) of common stock or Pre-Funded Warrants, (y) series A warrants to purchase up to 86,957 shares (17,391,306 shares prior to the April Reverse Stock Split) of common stock (the “Series A Warrants”), and (z) series B warrants to purchase up to 86,957 shares (17,391,306 shares prior to the April Reverse Stock Split) of common stock (the “Series B Warrants”) in a registered direct offering (the “Offering”) at a purchase price of $230.00 per share ($1.15 prior to the April Reverse Stock Split) and accompanying warrants or $229.80 per Pre-Funded Warrant ($1.1490 prior to the April Reverse Stock Split) and accompanying warrants. The Series A Warrants ~~will~~had ~~have~~ an exercise price of $345.00 per share ($1.725 per share prior to the April Reverse Stock Split) subject to standard adjustments for dividends, splits and similar events; a one-time adjustment on the date of issuance (as described in the warrants), subject to a floor price described therein; and also subject to adjustment upon a Dilutive Issuance (as described in the warrants), subject to a floor price described therein. The Series B Warrants ~~will~~had ~~have~~ an exercise price of $575.00 per share ($2.875 per share prior to the April Reverse Stock Split) subject to standard adjustments for dividends, splits and similar events; a one-time adjustment on the date of issuance (as described in the warrants), all of which were subject to a floor price described therein; and also subject to adjustment upon a Dilutive Issuance (as described in the warrants), subject to a floor price described therein. The Series B Warrants ~~may~~could also be exercised on an alternative cashless basis pursuant to which the holder may exchange each warrant for 3 shares of common stock. The Series A Warrants and Series B Warrants ~~will~~were beissuable ~~issued~~ at the second tranche closing and ~~will~~were be exercisable immediately after issuance and ~~have~~carried a term of exercise equal to five years from the date of issuance.

The Purchase Agreement contains customary representations and warranties and agreements of the Company and the Purchaser and customary indemnification rights and obligations of the parties.

The first tranche closing of the Offering occurred on February 27, 2025. The Company determined that the second closing of the Offering represents a firm commitment and a contingent forward contract to issue and sell additional shares of common stock or Pre-Funded Warrants and the Series A Warrants and Series B Warrants conditioned upon the receipt of approval by the Company’s stockholders to approve the issuance of the Series A Warrants, Series B Warrants and the ~~shares of common stock underlying such warrants. The Company determined that the contingent forward contract is a freestanding financial~~

2731

shares of common stock underlying such warrants. The Company determined that the contingent forward contract is a freestanding financial instrument that does not meet the requirements for equity classification due to certain settlement provisions that fail the indexation guidance in ASC 815-40 and meets the definition of a derivative. As a result, the contingent forward contract was recorded as a liability initially at its fair value on the date of issuance and will be subsequently remeasured to fair value on each balance sheet date until the underlying instruments are issued and sold in the second tranche closing of the Offering. The Company determined the initial fair value of the contingent forward contract to be $5,515,525. As of March 31, 2025, the fair value of the contingent forward contract was estimated to be $5,406,033 and was recorded within current liabilities. For the three months ended March 31, 2025, the Company recorded a gain of $109,492 from the change in fair value of the contingent forward contract, which is included in “Other (expense) income, net” in the condensed consolidated statements of operations.

The shares of common stock and Pre-Funded Warrants issued and sold in the first closing of the Offering were classified as a component of permanent equity and recorded at the issuance date using a relative fair value allocation method of the remaining proceeds of the Offering after recording the contingent forward contract at its fair value on the date of issuance. The Pre-Funded Warrants were equity classified because they were freestanding financial instruments that were legally detachable and separately exercisable from the equity instruments, were immediately exercisable, did not embody an obligation for the Company to repurchase its shares, and permitted the holders to receive a fixed number of shares of common stock upon exercise. In addition, such Pre-Funded Warrants did not provide any guarantee of value or return. As of March 31, 2025, all 55,392 Pre-Funded Warrants (11,078,480 prior to the April Reverse Stock Split) issued and sold in the first closing of the Offering had been exercised in exchange for the issuance of 55,392 shares (11,078,480 shares prior to the April Reverse Stock Split) of the Company's common stock.

~~Pursuant~~On toApril 3, 2025, the ~~PAA~~Company ~~between~~received the ~~Company~~necessary ~~and~~approval ~~Roth,~~by the Company’s ~~engaged~~stockholders ~~Roth~~in a specially called stockholder meeting to ~~act~~approve asthe issuance of the ~~Company’s~~Series ~~exclusive~~A ~~placement~~warrants, ~~agent~~Series inB ~~connection~~warrants ~~with~~and the ~~Offering.~~shares ~~The~~of ~~Company~~common ~~agreed~~stock tounderlying ~~pay~~such ~~the~~warrants, ~~placement~~in ~~agent~~addition ato ~~cash~~other ~~fee~~matters. ofOn April 7~~.5%~~, of2025, the ~~gross~~Company ~~proceeds~~closed the ~~Company~~second ~~receives~~tranche ~~under~~of its previously announced securities purchase agreement, dated February 27, 2025, with certain institutional investors for the ~~Purchase~~purchase ~~Agreement.~~and Assale of ~~March~~21,720 31shares (4,347,826 shares prior to the April 2025, Reverse Stock Split) of the Company’s ~~had~~common ~~incurred~~stock (or common stock equivalents in lieu thereof), Series A warrants to purchase up to an aggregate of86,957 $1shares (17,~~568~~391,~~099~~306 inshares ~~placement~~prior ~~agent~~to ~~fees~~the ~~and~~April ~~related~~2025 ~~offering~~Reverse ~~expenses,~~Stock Split) of ~~which~~the ~~$576~~Company’s common stock and Series B warrants to purchase up to an aggregate 86,~~593~~957 ~~were~~shares ~~allocated~~(17,391,306 shares prior to the ~~contingent~~April ~~forward~~2025 ~~contract~~Reverse ~~and~~Stock ~~expensed~~Split) inof ~~Financing~~the ~~Fees,~~Company’s common stock at an effective purchase price of $~~991,506~~230.00 ~~were~~per ~~allocated~~share ($1.15 per share prior to the ~~shares~~April of2025 Reverse Stock Split) (or common stock equivalents in lieu thereof) and ~~Pre~~associated warrants in a registered direct offering, which was priced at-~~Funded~~the-market ~~Warrants~~under ~~issued~~applicable ~~and~~Nasdaq ~~sold~~rules, for the second tranche gross proceeds of $5.0 million. Together with the approximately $15.0 million in gross proceeds from the previously announced first tranche closing ofcompleted ~~the~~on ~~Offering~~February ~~and~~27, ~~recorded~~2025, asthe aCompany ~~reduction~~raised toapproximately ~~APIC~~$20.0 million in ~~stockholders’~~aggregate ~~equity~~gross proceeds from the offering before deducting placement agent fees and other offering expenses payable by the Company.

The Company derecognized the contingent forward contract liability representing the firm commitment for the second closing on April 7, 2025, the date of the second closing. The Company determined the fair value of the contingent forward contract liability to be $4,399,054 immediately prior to the second closing. For the three and six months ended June 30, 2025, the Company recorded a gain of $789,588 and $899,080, respectively, from the change in fair value of the contingent forward contract, which is included in “Other (expense) income, net” in the condensed consolidated statements of operations.

The Series A warrants and Series B warrants did not meet the requirements for equity classification due to certain settlement provisions that fail the indexation guidance in ASC 815-40. As a result, the Series A warrants and Series B warrants were recorded as a liability initially at fair value on the date of issuance and were subsequently remeasured to fair value at each balance sheet date until exercised.

During the second quarter for 2025, the Series B warrants to purchase the Company’s common stock were fully exercised in exchange for the issuance of 3,260,870 shares (652,173,983 shares prior to the April Reverse Stock Split) of the Company’s common stock and are no longer outstanding as of June 30, 2025. The Company determined the fair value of the Series B warrants to be $8,637,203 immediately prior to exercise and recorded a loss of $8,025,504 from the change in fair value of the Series B warrants, which is included in “Other (expense) income, net” in the condensed consolidated statements of operations.

On June 26, 2025, the Company and holders of Series A warrants to purchase the Company’s common stock, mutually agreed to terminate and cancel the Series A warrants for an aggregate payment of to the Series A warrant holders of

$267,391. The Company determined the fair value of the Series A warrants to be $761,851 immediately prior to exercise and recorded a gain of $494,460 from the change in fair value of the Series A warrants, which is included in “Other (expense) income, net” in the condensed consolidated statements of operations. The shares of common stock issued and sold in the second closing and upon exercise of the Series B warrants are classified as a component of permanent equity and recorded at the issuance date fair value.

Pursuant to the PAA between the Company and Roth, the Company engaged Roth to act as the Company’s exclusive placement agent in connection with the Offering. The Company agreed to pay the placement agent a cash fee of 7.5% of the gross proceeds the Company receives under the Purchase Agreement. As of June 30, 2025, the Company had incurred an aggregate of $2,128,038 in placement agent fees and related offering expenses, of which $1,136,532 were allocated to the contingent forward contract and Series A and Series B warrants and expensed in Financing Fees, and $991,506 were allocated to the shares of common stock and Pre-Funded Warrants issued and sold in the first closing of the Offering and recorded as a reduction to APIC in stockholders’ equity.

NOTE 10 – INCOME TAXES

In the preparation of the Company’s condensed consolidated financial statements, management calculates income taxes based upon the estimated effective rate applicable to operating results for the full fiscal year. This includes estimating the current tax liability as well as assessing differences resulting from different treatment of items for tax and book accounting purposes. These differences result in deferred tax assets and liabilities, which are recorded on the balance sheet. Management analyzes these assets and liabilities regularly and assesses the likelihood that deferred tax assets will be recovered from future taxable income.

The Company’s effective income tax rate ~~from continuing operations~~ was (0.41%) and 0.1% for the three months ended ~~March~~June 3130, 2025. ~~The~~and ~~effective~~2024, ~~tax~~respectively ~~rate~~and ~~differs from the federal tax rate of 21~~(0.2%) ~~due to state income taxes~~ and ~~changes in valuation allowances related to deferred tax assets~~0.0% ~~The Company’s effective income tax rate from continuing operations~~ for the ~~three~~six months ended ~~March~~June 3130, ~~2024~~2025 ~~was~~and 02024.5% ~~and~~The ~~differed~~effective tax rate differs from the federal tax rate of 21% due to state income taxes and changes in valuation allowances related to deferred tax assets.

On July 4, 2025, the President signed H.R. 1, the “One Big Beautiful Bill Act,” into law. The legislation includes several changes to federal tax law that generally allow for more favorable deductibility of certain business expenses beginning in 2025, including the restoration of immediate expensing of domestic R&D expenditures, reinstatement of 100% bonus depreciation, and more favorable rules for determining the limitation on business interest expense. Certain provisions will be effective for 2025, while others will be effective for tax years beginning after December 31, 2025. The Company is currently evaluating the impact on the consolidated financial statements.

NOTE 11

NOTE 11 – SEGMENT INFORMATION

The Company’s segment structure reflects how management makes financial decisions and allocates resources. The Company manages its operations based on the combined results of the residential and commercial businesses with a geographical focus. The SUNation segment provides solar power, battery storage, and related services to customers primarily in New York and Florida. The Hawaii Energy Connection (“HEC”) segment provides the same products and services to residential and commercial customers in Hawaii. The Company’s CODM is represented by a committee that includes the Company’s CEO, CFO, and COO. The CODM regularly reviews discrete financial information for SUNation and HEC in deciding how to allocate resources and in assessing performance. Corporate and other represents the unallocated corporate business activities and corporate shared services, which support the Company’s operating segments, along with operating and other expenses related to legacy CSI assets.

unallocated corporate business activities and corporate shared services, which support the Company’s operating segments, along with operating and other expenses related to legacy CSI assets.

During 2024 management determined that their two operating segments no longer met the criteria to be aggregated into one reportable segment due to changes in economic forecasts and the Company’s plans for integrating SUNation and HEC. As a result, management determined HEC and SUNation to be distinct reportable segments. Prior period amounts have been recast for comparative purposes to reflect this change, which had no impact on the Company’s consolidated financial position, results of operations, and cash flows. The accounting policies of the segments are the same as those applied in the consolidated financial statements as disclosed in Note 2, Summary of Significant Accounting Policies.

The CODM committee evaluates performance for both reportable segments based on segment revenue, gross profit, and operating (loss) income before income taxes. When using these metrics, the CODM committee considers forecast-to-actual variances on a quarterly basis when making decisions about the allocation of operating and capital resources to each segment. The CODM committee also uses these metrics for evaluating pricing strategy to assess the performance of each segment by comparing the results of each segment with one another and in determining the compensation of certain employees.

Summarized financial information for the Company’s reportable segments are presented and reconciled to consolidated financial information in the following tables, including a reconciliation of segment earnings to income before income taxes. This reconciliation also represents the significant expense categories reviewed by the CODM.

						Corporate and
	SUNation		HEC		Other		Total
Three Months Ended March 31, 2025
Three Months Ended June 30, 2025
Sales	$	9,~~544~~820,~~554~~849	$	3,~~092~~243,~~084~~405	$	—	$	1213,~~636~~064,~~638~~254
Cost of sales		5,~~871~~859,~~972~~827		2,~~333~~364,~~341~~910		—		8,~~205~~224,~~313~~737
Gross profit		3,~~672~~961,~~582~~022		~~758~~878,~~743~~495		—		4,~~431~~839,~~325~~517
Operating expenses:
Selling, general and administrative expenses		3,~~847~~746,~~500~~504		~~976~~1,~~674~~021,320		1,~~215~~675,~~124~~905		6,~~039~~443,~~298~~729
Amortization expense		203,125		356,250		—		559,375
Total operating expenses		43,~~050~~949,~~625~~629		1,~~332~~377,~~924~~570		1,~~215~~675,~~124~~905		67,~~598~~003,~~673~~104
Operating loss		~~(378~~11,~~043)~~393		(~~574~~499,~~181~~075)		(1,~~215~~675,~~124~~905)		(2,~~167~~163,~~348~~587)
Other income (expenses):
Investment and other income		710,~~525~~722		72,~~276~~957		3313,~~364~~982		4827,~~165~~661
Fair value remeasurement of contingent forward contract		—		—		109,492		109,492
Fair value remeasurement of warrant liability		—		—		(7,531,044)		(7,531,044)
Fair value remeasurement of contingent value rights		—		—		19,179		19,179
Fair value remeasurement of contingent forward contract		—		—		789,588		789,588
Financing fees		—		—		(576,594)		(576,594)
Fair value remeasurement of contingent value rights		—		—		6,271		6,271
Interest expense		(15,857)		—		(555,383)		(571,240)
Financing fees		—		—		(559,938)		(559,938)
Loss on debt extinguishment		—		—		(343,471)		(343,471)
Interest expense		(15,098)		—		(147,032)		(162,130)
Other (expense) income, net		(8,332)		7,276		(1,313,413)		(1,314,469)
Loss on debt extinguishment		—		—		—		—
Net loss before income taxes	$	(386,375)	$	(566,905)	$	(2,528,537)	$	(3,481,817)
Other (expense) income, net		(4,376)		2,957		(7,428,173)		(7,429,592)
Depreciation and amortization	$	251,050	$	376,265	$	—	$	627,315
Net loss before income taxes	$	7,017	$	(496,118)	$	(9,104,078)	$	(9,593,179)
Assets	$	25,302,335	$	17,320,441	$	1,804,896	$	44,427,672
Depreciation and amortization	$	251,048	$	374,381	$	—	$	625,429
Capital expenditures	$	—	$	8,817	$	—	$	8,817
Assets	$	24,140,111	$	16,935,705	$	3,054,034	$	44,129,850

2934

						Corporate and
	SUNation		HEC		Other		Total
Three Months Ended March 31, 2024
Three Months Ended June 30, 2024
Sales	$	9,~~752~~731,~~970~~647	$	3,~~466~~817,~~227~~773	$	—	$	13,~~219~~549,~~197~~420
Cost of sales		56,~~801~~018,~~760~~778		2,~~611~~738,~~989~~288		—		8,~~413~~757,~~749~~066
Gross profit		3,~~951~~712,~~210~~869		~~854~~1,~~238~~079,485		—		4,~~805~~792,~~448~~354
Operating expenses:
Selling, general and administrative expenses		3,~~872~~970,~~455~~704		1991,~~002,052~~480		1,~~754~~596,~~520~~739		6,~~629~~558,~~027~~923
Amortization expense		203,125		506,250		—		709,375
Fair value remeasurement of SUNation earnout consideration		—		—		(~~350~~450,000)		(~~350~~450,000)
Total operating expenses		4,~~075~~173,~~580~~829		1,~~508~~497,~~302~~730		1,~~404~~146,~~520~~739		6,~~988~~818,~~402~~298
Operating loss		(~~124~~460,~~370~~960)		(~~654~~418,~~064~~245)		(1,~~404~~146,~~520~~739)		(2,~~182~~025,~~954~~944)
Other income (expenses):
Investment and other income		45,~~657~~115		13,~~807~~644		3918,~~377~~566		4527,~~841~~325
(Loss) gain on sale of assets		—		6,118		—		6,118
Fair value remeasurement of warrant liability		—		—		(3,267,571)		(3,267,571)
Fair value remeasurement of warrant liability		—		—		3,728,593		3,728,593
Fair value remeasurement of embedded derivative liability		—		—		(1,055,600)		(1,055,600)
Fair value remeasurement of contingent value rights		—		—		~~376~~116,~~085~~775		~~376~~116,~~085~~775
Interest expense		(2215,~~262~~388)		—		(~~742~~720,~~608~~245)		(~~764~~735,~~870~~633)
Other (expense) income, net		(1710,~~605~~273)		73,~~925~~644		3(4,~~401~~908,~~447~~075)		3(4,~~391~~914,~~767~~704)
Net (loss) income before income taxes	$	(~~141~~471,~~975~~233)	$	(~~646~~414,~~139~~601)	$	1(6,~~996~~054,~~927~~814)	$	1(6,~~208~~940,~~813~~648)
Depreciation and amortization	$	~~270~~255,~~603~~559	$	530,~~421~~443	$	~~768~~770	$	~~801~~786,~~792~~772
Capital expenditures	$	—11,985	$	~~5,594~~—	$	—	$	511,~~594~~985
Assets	$	27,~~568~~468,~~483~~300	$	2322,~~575~~786,~~775~~653	$	32,~~510~~598,~~099~~738	$	5452,~~654~~853,~~357~~691



						Corporate and
	SUNation		HEC		Other		Total
Six Months Ended June 30, 2025
Sales	$	19,365,403	$	6,335,489	$	—	$	25,700,892
Cost of sales		11,731,799		4,698,251		—		16,430,050
Gross profit		7,633,604		1,637,238		—		9,270,842
Operating expenses:
Selling, general and administrative expenses		7,594,004		1,997,994		2,891,029		12,483,027
Amortization expense		406,250		712,500		—		1,118,750
Operating (loss) income		(366,650)		(1,073,256)		(2,891,029)		(4,330,935)
Other income (expenses):
Investment and other income		18,247		10,233		47,346		75,826
Fair value remeasurement of warrant liability		—		—		(7,531,044)		(7,531,044)
Fair value remeasurement of contingent forward contract		—		—		899,080		899,080
Fair value remeasurement of contingent value rights		—		—		25,450		25,450
Financing fees		—		—		(1,136,532)		(1,136,532)
Interest expense		(30,956)		—		(702,414)		(733,370)
Loss on debt extinguishment		—		—		(343,471)		(343,471)
Other expense, net		(12,709)		10,233		(8,741,585)		(8,744,061)
Net loss before income taxes	$	(379,359)	$	(1,063,023)	$	(11,632,614)	$	(13,074,996)

Depreciation and amortization	$	502,098	$	750,646	$	—	$	1,252,744

Capital expenditures	$	—	$	8,817	$	—	$	8,817



						Corporate and
	SUNation		HEC		Other		Total
Six Months Ended June 30, 2024
Sales	$	19,484,617	$	7,284,000	$	—	$	26,768,617
Cost of sales		11,820,538		5,350,277		—		17,170,815
Gross profit		7,664,079		1,933,723		—		9,597,802
Operating expenses:
Selling, general and administrative expenses		7,843,159		1,993,532		3,351,259		13,187,950
Amortization expense		406,250		1,012,500		—		1,418,750
Fair value remeasurement of SUNation earnout consideration		—

Filing Compare · SUNation Energy, Inc.